Monitoring Investor Behavioral Finance: Examining Its Applicability on Egyptian Investors

The behavioral finance takes its fundamental principles from the economic theory. Behavioral finance
is a novel approach in the financial markets domain. It originates due to an urgent need to overcome
and deal with the outstanding issues that traditional investors face in today’s modern finance system.
Thus, it is said that certain investors who do not have perfectly sensible elucidation regarding some
financial situations and issues can recognize these issues better by means of certain financial models.
Likewise, in a number of behavioral finance models, investors are known to be unable to bring an upto-
date of their beliefs in the correct manner. The nature of behavioral models normally has integrated
perceptions from psychology with the neoclassical style of economic theory. However, other models
show that investors adopt questionable choices in some cases. Thus, this paper introduces the
behavioral finance, describes the background and the aims and objectives of the study, and it
introduces the standards of the behavioral finance. Investors in Egypt can make use of the findings
that show that anchoring match their finance behavior. A period of three consecutive days of stock
market past performance is considered as a trigger that shifts the investors’ perception regarding
market trend.