Scope It is hard to see that a rational man can invest.

John Maynard Keynes Newly developed field now explains the quotation that was made decades ago by a British renowned economist. Behavioral finance is the study of how psychological phenomena impact financial behavior. The long-term objective of behavioral finance is to behavioralize finance (Shefrin, 2008). Behavioralizing means tracing the implications of behavioral assumptions and aspects for the financial operations and decisions. Under the neoclassical based paradigm, finance is being related to micro economics frameworks but at the same time, researchers are now more interested in determining the behavioral aspects that underlie the decision making (Shefrin, 2008). Psychologists working in the area of behavioral decision making have produced much evidence that people do not behave always as per the frameworks put forward by the microeconomic theory but the behavioral components matter. Camerer, Loewenstein, and Rabin (2004) claims that behavioral economics (finance) increases the explanatory power of economics (finance) by providing it with more realistic psychological foundations. Renowned behavioral researcher Thaler (2005) forecasts from his expertise that behavioral finance is going to be playing an important role in every aspect of traditional finance beyond the decision making field and its role will be lighted be in securities markets as well. Baker and Nofsinger (2010) recently making evident Thalers forecast tells that behavioral finance has the potential to explain not only how people make financial decisions and how markets function but also how to improve them. It has been found that the findings of the behavioral finance research are being used by private bank advisors and portfolio managers, independent financial advisors, registered investment advisors, consultants and individual investors (Pompian, 2006). The key implication of the behavioral research is that it would enable asset managers, advisor to help their client building an optimal and profitable portfolio structure (Pompian, 2006) because they would be able to make a desired portfolio without any biased inclination therefore clients longterm goals will be fulfilled. Accordingly the financial managers of the companies can utilize the findings that behavioral finance put forward in a way, when they have to decide over the capital and working capital investments, they can use traditional finance models vis-a-vis behavioral research findings in order to arrive at unbiased and an optimal decision.

{A Behavioral Approach to Asset Pricing; Hersh Shefrin; 2008, Elsevier Inc.} {Advances in Behavioral Economics; Colin F. Camerer, George Loewenstein, and Matthew Rabin; 2004; Princeton University Press} {Advances in Behavioral Finance; Volume II; Richard H. Thaler; 2005; Princeton University Press} {Behavioral Finance: Investors, Corporations, and Markets; H. Kent Baker; John R. Nofsinger; 2010; John Wiley & Sons, Inc., Hoboken, New Jersey} {Behavioral Finance and Wealth Management: How to Build Optimal Portfolios That Account for Investor Biases; Michael M. Pompian; 2006; John Wiley & Sons, Inc., Hoboken, New Jersey}