The Allusions of Behavioral Finance

The deliberation in theoretical finance among the Efficient Market Hypothesis (EMH) and the subject of the behavioral finance is of immense interest. from the time when its emerge, the EMH has been the most significant theory which describes the behavior of the diverse agents in the financial markets and overlooks more or less any prospective impact of human behavior in the investment method. From the end of 1970s and the commencement of 1980s, a rising number of researchers and scholars showed the irregularity of this theory. The anomalies of the recent portfolio models and theories have provoked the development of behavioral finance. Behavioral finance assimilates psychology and economics in finance theory and has its heredity in the ground-breaking work of great psychologists Tversky and Daniel Kahneman (1979). The rationale of this study is to present a synthesis of the behavioral finance literature over the last two decades