Herd mentality, mob mentality or herding , describes how people can be influenced by their peers to adopt certain behaviours on a largely emotional, rather than rational, basis.
Herding is one of the biggest reason why people lose money while investing. Judging “collective” behaviour never do any good when it comes to making an important decision about investments. Most naturally, following what majority of people has chosen is always a tempting and “safe” option to go for. However, without foreseeing the background, one can’t be sure of any important decision.
The first golden rule of investing is to avoid herd mentality!