The Psychology of Stock Investment: Understanding Emotions That Affect Investment Decisions

stock portfolio management

A stock market is a funny place – both the seller and buyer of a stock think they are doing the right thing. However, only one can be right. In 2020 and 2021, we saw a spike in equity investors – the market was moving in one direction only. However, in the last 18 months, we have seen a lot of volatility in the market – the market is moving sideways. 

Most investors are worried about their sinking portfolios. In such situations, the biggest challenge for investors is controlling their emotions. Even though we know the market will move north in the long run, our emotions affect investment decisions. 

In times like these, another important thing is to go for stock portfolio management and asset allocation. Today, we will focus on understanding the psychology of stock investment.

Understanding emotions affecting investment decisions

If you are looking for an answer to the question – How can I invest in the share market, you need to understand the emotions that affect investment decisions. If you can master your emotions, your chances of becoming a successful investor will increase exponentially. However, it is one of the toughest things to achieve – even seasoned investors fail to do so.

Let us look at different emotions and how they affect your investment decisions:


If you are going through negative emotions as the market is volatile, you must learn how to control your emotions. If you are unable, you may want to seek professional help. You can look for a top SEBI registered investment advisor and let them manage your portfolio. Alternatively, you can let the machine manage your portfolio. With an AI-driven platform like Jarvis, you can eliminate the emotions from your investment.

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