Behavioral finance is the study of how psychology affects investor behavior and financial markets. The study of behavioral finance relies on the assumption that investors and other financial decision-makers do not always behave rationally and instead often make choices based on cognitive biases or emotional responses; in turn, researchers in the field study how psychological and emotional forces c
What Is Behavioral Finance? (Plain Language Explanation)
Behavioral Finance refers to a pattern of thoughts, feelings, and behaviors that many people experience. While it can be challenging, it's also well-understood and treatable.
Key Terms to Know About Behavioral Finance
- Symptoms: The specific ways behavioral finance shows up for you
- Triggers: Situations or thoughts that activate or worsen behavioral finance
- Evidence-based: Treatments backed by scientific research
- Comorbidity: When behavioral finance occurs alongside other conditions
3 Things Most People Don't Know About Behavioral Finance
- Behavioral Finance is far more common than most people realize
- Behavioral Finance is not caused by weakness — it has identifiable biological and psychological causes
- Most people with behavioral finance see significant improvement with the right support
Your Next Steps
Learning about behavioral finance is just the beginning. If you think you're experiencing behavioral finance, speaking with a mental health professional is the most valuable next step.