KARACHI:
There is a growing concern regarding the impact of behavioural and cognitive biases on investment decision in Pakistan. Investors in the Pakistan Stock Exchange often do not behave rationally as suggested, and are influenced by psychological and emotional factors, especially in uncertain and volatile market conditions.
Biases such as halo bias, farming bias, locus of control and overconfidence significantly affect investor behaviour. In financial literacy, weak regulatory framework and information asymmetry further intensify these issues. As a result, may investors make irrational decision, leading to financial losses and reduced trust in the market.
It is important for policymakers and financial institutions to improve financial awareness and strengthen regulations. Educational programmes and transparent information systems can help investors make better and more informed decisions. Addressing these issues is essential for improving investor confidence and ensuring sustainable economic growth in Pakistan.
Ghazala Panhwar
Dadu
