Domain: Behavioral Finance
The paper examines the effect of the recent stock market crash of 2007 among investors in UK. In this study, we examine the theoretical concepts of markets and critically analyse why the theoretical base failed to predict market behaviour during the crisis. In the discussion, it evolves that behaviour guide decision making and that is where the theoretical base seeks support from behavioural finance. Individual behaviour patterns determine cognitive decisions while making investments. Such behaviour is also guided post crisis by the impact of it. The paper analyses the behavioural causes behind the crisis and develops behavioural patterns observed among UK investors after the effect of the crisis was experienced completely.