Background: The rising impact of retail investors globally, propelled by technological advancements and profit prospects, is highlighted. Nasdaq data supports the surge in retail investor engagement in the U.S. and Swedish stock markets. Significantly, the discussion delves into behavioral finance theory, acknowledging cognitive biases like overconfidence and loss aversion that mold investor choices. Investor psychology scrutinizes the impact of these biases, unveiling underlying beliefs and behaviors. The historical progression of behavioral finance dates back to the early 20th century, challenging conventional finance assumptions. Understanding and tackling these biases are pivotal for making informed investment decisions and enhancing market efficiency.

Purpose: This paper aims to better explore how behavioral finance affects the Swedish retail investors’ decision-making process, combining established research and a survey.

Method: The study in this research paper was conducted through a quantitative survey with close-ended questions. The survey was distributed to retail investors based in Sweden.

Conclusion: The results show that behavioral biases significantly influence retail investors globally, yet their prevalence varies due to regional factors. In Sweden, biases like overconfidence, regret aversion, and others shape investor behavior, influenced by demographic factors. Addressing these biases requires tailored financial education and regulatory measures. Understanding them benefits stakeholders beyond investors. Innovative interventions and educational initiatives are crucial, promoting informed decision-making. Recognizing global and regional variations in biases is essential for effective interventions, benefiting investors in Sweden and globally in an increasingly diverse society.