The biggest investing risk: herd mentality

The Biggest #Risk in #Investing: The #HerdMentality!
Till recently, no one was really interested in #Gold; even if anyone was recommending it, people were running after more flashy assets!
Tables have turned now, with the recent Gold bull run, suddenly everyone wants to be part of it!

This isn’t just about gold, it’s about how we behave as investors.
Our investments are generally driven by #RecencyBias, rather than real analysis or strategy! Our tendency to believe that what’s going up will keep going up.

📊 Let’s look at some examples:
- Till last year, everyone was after #Equity investments; this year, with Nifty giving flat returns, memes are being floated about how FDs (Fixed Deposits) are better than Equities!
- #Crypto has a similar story: In 2021, Bitcoin soared to nearly $69,000. Retail investors rushed in, only to watch it fall by over 75% in the next 12 months. With recent growth, everyone wants a slice!

Sadly, #finfluencers further fuel the #FOMO, through Memes (Invested in stocks got 1% return, while my Mom got 50% returns in Gold)! Next year, the same person would share the reverse Meme, but then we all have short-term memory, so #WhoCares!

Truth is:
Investment success isn’t about chasing what’s hot; it’s about staying disciplined, following the plan, and investing in assets that a person can understand.

So before following the crowd, ask yourself -
“Am I investing because it makes financial sense, or because everyone else is doing it?”