New Delhi, Jan. 10 -- The funny thing about recency bias is that it tricks you into ignoring hard evidence and convinces you that your most recent experience is the only truth. But when you let that bias dictate your investments, you set yourself up for some financially fatal mistakes.

You invest in a mutual fund just by looking at last year's returns because your friend owns it and has been tom-toming about it ad nauseam. And then, a couple of years later, you discover that yesterday's hero has become today's dud.

That's exactly what a study by PGIM India Mutual Fund reveals, highlighting just how unreliable recent performance can be as a guide to future returns. The study tracked the top 10 equity mutual funds in 2014 and mapped how t...