Friday 17 October 2008

Why do investors lose money in the stock market?

Basically, investors tend to lose money because of the twin evils - "greed' and "fear".

Therefore, a wise investor needs to control himself against greed. Perhaps by cultivating a sense of contentment, an investor would be able to overcome greed. After all, a contented person is able to tell himself, "Well, I have made some profits. Thus, I have made my money work for me. Now is the time for me to sell my shares and put my money in the bank."

Similarly, he also needs to be cool and not lose his nerves when the stock market tumbles. In such a situation, an investor must learn to tell himself, "At least, the buying opportunity has arrived. I have the money and I will buy some undervalued shares and lock them up until the next bull run."

With the aforesaid frame of mind, an investor would be on his way to emerging as a winner in the game of shares investment.

GREED
$2? I'll wait for $3
GREED
$3? I'll wait for $4
FEAR
Market may collapse. $1.50 now? Sell!

Ref:

Making Mistakes in the Stock Market by Wong Yee

http://tradingbursamalaysia.blogspot.com/2008/10/still-falling.html Where is the bottom? Ans: I don't know now but I will tell you when I see signs of bottoming.

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