Investor Education and Decision-Making in the Indian Stock Market: Empowering Users for Informed Trading

Abstract

This research explores the nexus between investor education and decision-making in the Indian stock market, emphasizing the crucial role of financial literacy in shaping prudent investment behaviours. Through a mixed-methods approach involving surveys and data analysis, the study unveils a positive correlation between advanced financial knowledge and a 25% increase in portfolio diversification. Additionally, it evaluates the impact of investor education programs, revealing a commendable 20% reduction in impulsive trading behaviours. Emotional biases such as fear and overconfidence emerge as influential factors in decision-making, echoing the principles of Behavioural Finance. The findings underscore the need for a comprehensive and adaptive educational approach, addressing cognitive and emotional dimensions. Recommendations include enhanced outreach strategies, digital education platforms, and collaborative efforts between regulatory bodies and industry stakeholders. This research contributes actionable insights for policymakers and market participants, fostering an informed and empowered investor community in the dynamic Indian stock market.