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Abstract
Behavioural finance integrates multidisciplinary fields such as finance, psychology, behavioural science and sociology. Theories of behavioural finance that are built on the models of standard finance can help the investors to understand their own behaviour and thus help them to improve upon their decision-making process (Sewell, 2007 and Kannadhasan, 2006).At the time of portfolio decision making, investors will exhibit herd behaviour with the same preference and action imitation, gradually forming herd effect. This research paper analyzed the performance and causes of individual investors’ herding behaviour under the premise that people want to be rational and suggest relevant investment strategies to investors, which will ensure effective wealth generation in the long run.