what is behavioral finance 
behavioral finance combines psychological theories with conventional economics and finance to explain why people make irrational financial decisions 15 it challenges the traditional assumption that investors should be rational and markets are ultimately efficient instead behavioral finance suggests that various cognitive biases emotions and other psychological factors can significantly influence investor behavior and market outcomes the field examines how these factors can lead to anomalies in financial markets and the january effect has long been seized upon as an example that deviates from logical profit maximizing behavior can you make money exploiting the january effect unlikely even if the january effect were real it s probably not and markets were to rise uncharacteristically each january the fact that people may try to exploit this would undermine its appearance for example in anticipation of higher prices in january some would move in december to pick up certain assets but that demand itself would lessen the price changes between before and after the new year 