Communications in Humanities Research ISSN: 2753-7072
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Research Article

How Market Turmoil Affects Investors' Investment Psychology

Hanjie GongWuhan University of Science and Technology*

* Corresponding author: [email protected]

Abstract

Using bibliometric research methodology, this study provides insights into the impact of market turmoil on investors' investment psychology, revealing the significant influence of financial markets on investment decisions. The findings of the study emphasize that investors mostly exhibit fearful, extremely risk-averse emotions when faced with market downturns. Overall, the study advocates for a diverse approach to investment decision-making that combines different methods of analyzing market situations and controlling emotions to increase the stability of an individual's investment in times of market turbulence and reduce financial losses, leading to a more inclusive and prosperous economic landscape.With every arrival of financial crisis causing bankruptcy or severe financial losses for a large number of investors, finance exists for everyone. There has been a great deal of literature on what factors influence investors' investment psychology, but these studies do not do a good job of linking the influencing factors to a specific context, such as the severe impact of the 2020 New Crown Epidemic on the financial markets. The world landscape is ever-changing, and the crises that investors have to deal with are beginning to be complex, specific, and diverse. This paper collects and analyzes relevant literature to focus on the relationship between specific crisis environments and investor psychology, and divides crisis periods into two categories to illustrate how they affect investors' psychological activities.

Keywords: Financial crisis; market turmoil; behavioral finance; investment psychology
Published: August 27, 2024
DOI: 10.54254/2753-7064/39/20242209
Volume: CHR Vol.39
pp. 129-135
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