Investor Psychology in Volatile Markets: An Empirical Study

  • Unique Paper ID: 196173
  • PageNo: 128-130
  • Abstract:
  • Financial markets are increasingly characterized by high volatility due to globalization, economic uncertainty, technological advancements and rapid information dissemination. During volatile periods, investor behaviour often deviates from rational decision-making due to psychological influences. Primary data was collected from 25 investors using a structured questionnaire. This study explains how investor’s psychology affects investment decisions during market ups and downs. This study examines the impact of emotional and cognitive biases on investor behaviour. Many investors do not make decisions purely based on logic. Their emotions, fear, confidence, and market rumors also influence them. The study is purely based on 25 investors. Data was collected using a questionnaire with a five-point Likert scale, Percentage analysis and mean score methods were used to study the responses. The findings reveal that fear of loss, herd behaviour and overconfidence significantly influence investment decisions during volatile market conditions. The study gives useful suggestions for investors and policymakers.

Copyright & License

Copyright © 2026 Authors retain the copyright of this article. This article is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

BibTeX

@article{196173,
        author = {Dr. V. Shiva Laxmi and Ms. Sravani Vangara},
        title = {Investor Psychology in Volatile Markets: An Empirical Study},
        journal = {International Journal of Innovative Research in Technology},
        year = {2026},
        volume = {12},
        number = {no},
        pages = {128-130},
        issn = {2349-6002},
        url = {https://ijirt.org/article?manuscript=196173},
        abstract = {Financial markets are increasingly characterized by high volatility due to globalization, economic uncertainty, technological advancements and rapid information dissemination. During volatile periods, investor behaviour often deviates from rational decision-making due to psychological influences. Primary data was collected from 25 investors using a structured questionnaire. This study explains how investor’s psychology affects investment decisions during market ups and downs. This study examines the impact of emotional and cognitive biases on investor behaviour. Many investors do not make decisions purely based on logic. Their emotions, fear, confidence, and market rumors also influence them. The study is purely based on 25 investors. Data was collected using a questionnaire with a five-point Likert scale, Percentage analysis and mean score methods were used to study the responses. The findings reveal that fear of loss, herd behaviour and overconfidence significantly influence investment decisions during volatile market conditions. The study gives useful suggestions for investors and policymakers.},
        keywords = {Investor Psychology, Behavioural Finance, Cognitive Bias, Market Volatility.},
        month = {March},
        }

Cite This Article

Laxmi, D. V. S., & Vangara, M. S. (2026). Investor Psychology in Volatile Markets: An Empirical Study. International Journal of Innovative Research in Technology (IJIRT), 12(no), 128–130.

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