A STUDY ON IMPACT OF BEHAVIORAL BIASES ON

INVESTMENT DECISION MAKING AT AMBALAL

SHARES AND STOCKS PRIVATE LIMITED VANIYAMBADI
Submitted By
ASHWINI C
(Reg. No.35820U08007)
Under the guidance of
Mr. G. MURUGAN MBA., M.Com., M.Phil., SET
Assistant Professor
 Introduction
Investment
Investment refers to the act of putting money,
time, or resources into something with the
expectation of generating a profit or achieving a
specific goal. In finance, investment typically
involves the purchase of financial assets such as
stocks, bonds, or real estate, with the
expectation of earning a return on the
investment.
 Behavioral biases
Behavioral biases in investment refer to the
systematic ways in which people deviate from
rational decision-making when making
investment decisions. These biases are often
driven by psychological, emotional, and social
factors that can lead investors to make
suboptimal decisions.
 Objectives of the study
• To study the demographic profile and investment profile of
the investors.
• To identify the presence and impact of behavioral biases of
individuals with risk preferences on investment decisions.
• To ascertain whether the decisions of other investors
influences the individual during investment.
• To know whether the individual consider the macro
economic variables before making investment decision.
• To find whether the investors sell/exit their investment
when there is negative news in media.
 Scope of the study
• This study is conducted in Vaniyambadi town and exclusively
for Ambalal customers.
• This study helps to know the impact of behavioral biases of
investors during investment.
• This study helps to identify the investor’s decision making on
investment.
• Through this study, we can determine the factors which
influence the investment decision making of the investors.
• The study can be used to bring out the solutions for the
impacts of behavioral biases faced by the investors during
their investment decisions.
 Limitations of the study
• The study is limited only to Ambalal Shares
and Stocks Private Limited.
• The study is purely based on the behavioral
biases of investor’s decision making and its
impact.
 Company Profile
• Ambalal shares & stocks private limited (ASSL) is one of
the fastest growing and 1st corporate member of NSE and
BSE having Registered & Corporate office at Vellore and
aims to render services in equities, futures & options,
currency derivatives, mutual fund and insurance across
India. Ambalal financial services was started on Jan 2010
with the franchise from IFIN.
Branches:
• Ambalal has its branches in many places like Chennai,
Erode, Gudiyatham, Kirshnagiri, Salem, Tanjore,
Vaniyambadi and Vellore.
 Total Revenue and Turnover:

•At the beginning : 11 lakhs in a month end.

•First year : Clocked turnover of 2,285 cr in equity and 11,241 cr in
commodity segments.
Reached 1 cr in equity market and 1.5 cr in commodity
market.
•Second year : 6420 cr in equity turnover and 25,200 cr in commodity turnover.
Crossed 2 cr in equity and 3 cr in commodity revenues.
•Third year : Turnover of 8342 cr in equity and 20,000 cr in commodity.
Continuing years : 10,000 cr in equity and 11,700 in
commodity
 Review of literature
The researcher collected totally 13 reviews a further in that few are presented here.
The research gap found is that no one has studied behavioral biases in vaniymabadi
town with reference to Ambalal stock broking Private Ltd.

• Odean, T. (1999) examines the behavioral biases that lead investors to trade too
much and incur unnecessary transaction costs, which ultimately reduces their returns.
The author finds that overconfidence, a preference for lotteries, and the disposition
effect are some of the most common biases that affect investment decisions.
 
• Barberis, N., & Thaler, R. (2003) provides a comprehensive review of the literature on
behavioral finance and the impact of various biases on investment decision making.
The authors explore how biases such as overconfidence, anchoring, and herding can
lead to irrational investment behavior and affect stock prices.
 Research Methodology
• The researcher used Descriptive research the
purpose is to describe the phenomenon or market
characteristics. It involves the description of the
extent of association between two or more variable
• Type of Data Collection :Primary and Secondary
• Sampling Method: Convenience Sampling
• Sample size:147
• Research Tool: Percentage Analysis.
 Findings

• It was found that 61% of the respondents are male.

• It has been pointed out from the study 40% of the
respondents are from 25 to 35 age group.
• From this study, it was found that 70% of the
respondents are married.
• It was identified that 90% of the respondents earns
annual income below 2 lakhs.
• It has been pointed that 94% of the respondents
allocate their percentage of income for investment is 0
to 10%.
• It was found that 83% of the respondents strongly
disagrees for investing without considering the risk
in the stock market.
• It was found that 41% of the respondents are often
influenced by other investors in investment
decision.
• It was observed that 91% of the respondents
strongly agrees in selling/exiting their investment
when there is a strong negative news in media.
 Suggestions
• The stock market company has identified the overall
perceptions and expectations of the investors during their
investment.
• The company has analyzed the various impacts of
behavioral biases on decision making of the investors
during their investment.
• From this study, the company can sort out the investors
based on their decision making process in their investment.
• They can provide guidance for the investors for further
investment decisions before making an investment.
 Conclusion
In conclusion, this research project aimed to
investigate the impact of behavioral biases on
investment decision-making among investors in
Ambalal shares and stocks private limited. The study
identified the demographic and investment profile of
the investors, the presence and impact of behavioral
biases, the influence of other investors on investment
decisions, consideration of macroeconomic variables,
and the tendency to sell or exit investments during
negative media news.
The study provides valuable insights for Ambalal shares
and stocks private limited in understanding the investors'
perception and expectation during their investment.
The company can analyze the various impacts of
behavioral biases on investors' decision-making process,
classify investors based on their decision-making process,
and provide guidance for investors before making an
investment.
This study contributes to the understanding of behavioral
biases in investment decision-making, which can help
investors in making more informed decisions and avoid
potential losses.
 References
• Odean, T. (1999). Do investors trade too much?. American
Economic Review, 89(5), 1279-1298.
• Barberis, N., & Thaler, R. (2003). A survey of behavioral
finance. Handbook of the Economics of Finance, 1, 1053-
1128.
Websites:
• National Stock Exchange (NSE): https://www.nseindia.com/
• Bombay Stock Exchange (BSE): https://www.bseindia.com/
• Ambalal Shares and Stocks :
http://www.ambalalshares.com/