GLOSSARY TERM
Herd Behaviour
Herd behaviour means copying what many other investors are doing instead of following your own plan.
What does this mean in practice?
People often feel safer doing what everyone else seems to be doing, especially when markets are rising fast or falling sharply. But following the crowd can lead to emotional decisions rather than thoughtful ones, especially when excitement or fear is strong.
Example
A popular stock is rising quickly, many people online are buying it and you join in mainly because others are doing so, not because it fits your long-term strategy.
Why it matters
Herd behaviour can lead to buying high, selling low and moving away from a disciplined approach. Understanding it can help you make decisions more calmly and independently.
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