how does behavioral finance view asset allocation 
behavioral finance explores how common cognitive errors might influence our financial choices for our asset allocation we might be swayed too much by recent market trends overconfidence sunk cost reasoning or loss aversion which can lead to less beneficial allocation choices awareness of these cognitive biases can help you keep a disciplined long term approach aligned with your goals the bottom linemost financial professionals will tell you that asset allocation is one of the most important decisions investors can make the selection of individual securities is secondary to how assets are allocated in stocks bonds and cash and cash equivalents which will play more of a role in your investment results 