FYI: "Behavioral finance” is the study of human behavior and how that behavior leads to investment errors, including the mispricing of assets. The field has gained an increasing amount of attention in academia over the past several decades as pricing anomalies have been discovered.
The basic hypothesis of behavioral finance is that, due to behavioral biases, investors/markets make persistent mistakes in pricing securities. An example of a persistent mistake is that investors/the market underreacts to news—both good and bad news are only slowly incorporated into prices.
Regards,
Ted
https://www.etf.com/sections/index-investor-corner/swedroe-impact-bias
