While conservative and conventional finance accentuates theories such as portfolio optimization theory, the capital asset pricing model and the efficient markets hypothesis , the emerging field of behavioural finance investigates the more prominent psychological and sociological issues that impact the decision-making process of individuals, groups, and organizations. It holds out the prospect of a better understanding of financial market behaviour and scope for investors to make better investment decision based on an understanding of the potential pitfalls. This paper will discuss behavioural finance theories like overconfidence, loss aversion, the problem of inertia, financial cognitive dissonance, the theory of regret, and the prospect theory. In conclusion, the paper will provide strategies to assist individuals to resolve these “mental mistakes and errors” by recommending some important investment strategies