The Effect of Behavioral Finance on Stock Investment Decisions

Investors in Amman Stock Exchange

1. Investors at ASE should view the global and regional variables that may have impact on prices levels and thus effect investment decisions. So, this recommendation seems to be suitable for ASE investors to improve their investment performance. However, overconfident traders tend to underestimate the associated risks of active stock investment, which can affect badly to their investment result. Therefore, acceptable advice for the investors is that overconfidence is great for their investment if they can use it in the clever and suitable ways.
2. Amman stock market is not mature and lack of reliable information, so that individual investors should choose good investment partners or alliance to consider as references for their investment. They can establish the forums to support each other in finding reliable information of stock market. The cooperation of a crowd of investors can help them limit the risks and increase the chances to have good investment results.
3. Loss aversion investors should not concern with investing in high price share, and avoid deceased in value, because there are factor control price movement, such as market forces and information. The probability of sudden change in price should take into consideration when make stock investment decision, in order to avoid high loss, and maintain capital.