Becoming your own investment advisor and money manager is not easy, but it can be done and if it is an activity you truly enjoy, it can be extremely rewarding.
One of the constant themes of the original '60s television series "Star Trek" dealt with the relative strengths and weaknesses of emotion verses reason. Captain Kirk, the captain of the Starship Enterprise, often made decisions based on his human instincts, which his purely logical Vulcan first officer, Spock, sometimes found irrational. However, these "gut-based" decisions yielded positive outcomes that seemed improbable based on reasoned analysis.
At times, emotion and instinct proved successful, even in the face of reason. Unfortunately, while instinct prevailed in outer space, when it comes to investing, Spock would beat Captain Kirk over the long term. There are instances when following a hunch proves profitable - but not often. Over the long term, reason, logic and discipline will beat out emotion every time.Our problem is that, like Captain Kirk, we are human. Divorcing ourselves from emotion is against our nature. Still, to the extent we are able, that is what we must do. Fear will lead you to sell just when an investment's falling price is near its bottom. Over-optimism will cause you to buy just when the price is at its peak. Disciplining your emotional side is no easy task - even for a trained, experienced professional. Before you attempt to do it yourself, you must make an honest assessment of your emotional make-up. You don't have to be Spock, but you can't be Chicken Little either!
Emotional investing is bad for your health and your purse too. You will be driven to make decisions which you may regret later on. An emotional person can never trade in the stock market for too long. Keep all your emotions and feelings locked in the cupboard before starting trading in the stock market. Here are a few points jotted down about emotional investors in the stock market.. Just take a look and you can figure out if you are one among the thousands of emotional traders out there who is impatient and weak minded when it comes to the ups and downs of trading.
1. You are an emotional investor if you find any of the below points to resemble your character.
2. You quote for a particular stock and are cheer if it even goes up by a single penny.
3. You are in touch with your broker every single day and enquire about your holdings.
4. You tend to scratch your head and bite your nails while watching the closing hours of the market.
5. You get emotional and tend to cry if your stock is showing a 10% decline.
6. You are exited when you get a tip from your colleague about a big stock which is going to make huge money and you have even not heard about the stock.
7. You sweat at the drop of a hat and you wear the same clothes till you have a bad day.
8. You join chat rooms and pay undivided attention to what everyone is buying and selling and then take your decisions.
9. You tend to stare hard at your portfolio and refresh it every five minutes.
10. You get mad at everyone and anyone on a bad trading day.
11. You celebrate when your stocks have made huge profits but you have not realized then as yet.
12. You want to go to the loo often when your stocks are trading at a very high level, or your stocks are seeing to bite dust.
13. You place the stop loss order price at a price less than 0.5% below your purchase price because you are really scared of losses.
14. You cry uncontrollably even after losing 5 dollars.
15. You yell, scream and insult the stock analysts and experts after a bad session.
16. You throw a big party and drown all your profits without making a saving.
These may sound silly but they are true with most people who are emotionally involved in the stock market. Try to keep your cool and trade cautiously and carefully and see that you have made enough savings to keep you afloat during bad times..
Tiada ulasan:
Catat Ulasan
We like to hear your opinion..