New Delhi, July 4 -- Several behavioural economists have argued that market bubbles and crashes are often amplified by herd behaviour. While the sectors and themes may change every year, the tendency to chase the "flavour of the season" remains a recurring feature of financial markets. One of the biggest casualties of this behaviour is asset allocation.

A well-diversified portfolio draws on the strengths of different asset classes, matches it with an investor's risk appetite and supports sustainable long-term wealth creation. Blindly chasing the hottest investment theme, on the other hand, not only hurts your portfolio but also prevents you from evaluating financial products through the equally important prism of cost-benefit analysis. ...