Behavioural finance is the study of how the behaviour of the managers are, and how it affects the market, it also deals with the psychology and sociology of the managers. It results in providing accurate fundamental analysis, helps in taking accurate decisions and helps to understand why people invest in stock (buying and selling) without doing proper research. In simpler terms, behavioural finance is the study of how the investors think and get influenced, also it focuses on the behaviour of investors, that they have their own decision making power and have their limits and boundaries. It also affects the market, as the investors are the key players in the market. Also, behavioural finance extracts the real-life experience of the investor. The importance of behavioural finance is that it helps in drawing a line between expectations and logical thinking.
The actual behaviour of the investor. It also helps the investor to enhance her/his experience and improve professional communication skills and also establishes deep relationships with the clients for better results or outcomes. Traditional finance is the assumption that investors could take decisions and be dependable upon the information in a neutral way. Also, the traditional theory is all about how the investors or other stakeholders perceive a particular venture or business opportunity. And how willing is someone to put their funds in it?
Financial analysts take decisions depending upon the accurate information and obtain the skills to convert the information logically. The main sources of finance which could be traditionally obtained are the resources present inside the organization which are the company’s assets as mentioned and proven otherwise as per textbooks complying with financial education. The retained earnings could also be a huge source. Retained earnings are a part of revenue kept aside for further use.
The following are the highest paid jobs in the field of finance
- Investment Banker
- Information Technology Auditor
- Compliance Analyst
- Financial Advisor
- Insurance Advisor
- Financial Analyst
- Senior Accountant
- Hedge Fund Manager