The year 2008 has been a year of global slowdown and slump for the global equity market, in general and stock markets of India, in particular. During 2008, Sensex (BSE Index) fell down from 21,206 (Indian Historical High of Sensex) to 16,000 points in a single month, i.e., in January 2008. In October 2008, it crossed the support level of 8,000 points. Weak global atmosphere coupled with heavy selling by FIIs and hedge funds led to this market crash. Against this backdrop, this paper analyzes the investment behavior of student investors. Furthermore, the purpose of the study is to identify the factors responsible for this crash and investigate whether the investment objectives and factors influencing investment decision-making are different during and after the market crash. This empirical study is based on a structured questionnaire directed towards the management students who invest and actively trade in the equity market. The results obtained in the research suggest that the behavior of market participants during the speculative bubble was to some extent unreasonable and that the composition of investments has changed as a consequence of market crash. When compared the time period after the speculative bubble, information available from companies gained significance for all investors. This specifies an increase in the importance of fundamental data of the companies after the crash than during the speculative bubble, when intuition and other unclear valuation methods seemed to have influenced investments to a greater extent.

The equity markets have been represented by increasing volatility and fluctuations during the past few years all over the world. The progressively more integrated financial markets are gradually exposed to macroeconomic shocks which affect markets on a global scale. From a common investor's point of view, the weakness of markets has lead to increased uncertainty and volatility, as market conditions cannot constantly be evaluated with the help of traditional financial measures and tools. Stock market participants have for a long time relied on the concept of efficient markets and rational investors who always capitalize on their utility and display perfect self-control, which is becoming inadequate these days. During the recent years, cases of market inefficiency in the form of market anomalies and irrational investor behavior have been more frequent. Theories based on ideal predictions, completely flexible prices, and complete idea of investment decisions of other players in the market are increasingly impractical in today's global financial markets. In the modern finance theory, behavioral finance is a new paradigm, which seeks to appreciate and expect systematic financial market inference of psychological decision-making (Olsen, 1998). By understanding the human behavior, attitude and psychological mechanisms involved in financial decision-making, standard financial models may be modified to better replicate and explain the reality in today's developing markets.

The traditional standard finance theory is the body of knowledge constructed on the pillars of the arbitrage philosophy of Miller and Modigliani, the portfolio theory of Markowitz and the Capital Asset Pricing Model (CAPM) of Sharpe, Lintner and Black (Statman, 1999). These theories believe markets to be efficient and are highly analytical and normative. On the other hand, modern financial theory is based on the assumption that the market actor makes decisions according to the adages of expected utility theory and makes neutral forecasts about the future. The expected utility theory says that an investor is risk averse and the utility function of a person is concave, that means the marginal utility of wealth decreases. Here, the asset prices are set by rational investors and, therefore, rationality-based market symmetry is achieved, where securities are priced according to the efficient market hypothesis.

Behavioral Finance Journal, Indian Stock Market, Global Equity Market, Standard Financial Models, Decision-Making Process, Capital Asset Pricing Model, CAPM, Efficient Market Hypothesis, Financial Assets, Mental Accounting, Financial Markets, Interpersonal Communications, Investment Strategies.