stock investing beginners guide
Why you must keep your emotions out of investing?
Investing your money is a personal thing. It’s your money; you work hard for it so of course you have an emotional attachment to it, which can lead to problems. Stock markets are often driven by our emotions. The three overriding emotion are confident, greed and fear. If it were possible to take emotions out of stock investing, the market would be a lot more stable place to invest.
So how do our emotions effect investing? Mostly they cloud our judgement. Logical decisions are difficult come by when our emotions are at play. Investors who do well on the stock market are generally able to set the emotion a side when deciding to buy or sell. If you can’t trust your emotions when investing it might be wise to get someone else to make your investment decisions for you such as a financial advisor. They can do all the research make the calls for you regarding your portfolio; and when you think about writing an investment plan nominate your goals and financial targets , have an exit limit in your plan. This will help you buy and sell when the market is running hot. If you already have your limits set here emotions can’t take over as long as you follow the plan. If worse comes to worse and you really want to play the stock market differently than your original plan says, sleep on it; make yourself wait a day and then look at the deal again. If u think it’s a good idea then go with it. Sometimes it’s hard to let go of stock for some reason u made an emotional attachment to it. perhaps it was a good performer for you a couple of years ago are you particularly like the product the company makes but if the sock is not performing for you, you need to ignore your emotions and make a sensible decision to let go;
Try and be honest with yourself; have you made a bad decision? Do you really thing stock was a good investment? Sometimes pride gets in the way and investors can’t admit they were wrong and they hang onto a bad stock. there’s no shame in admitting to a mistake but it’s pretty stupid to ignore a mistake and not get out of a bad investment before it turns worse. When things are going well don’t let the greed monster takes over; remember your exit limit. It’s exciting when the markets keep climbing you just know you’re going to make a fortune or are you? Not if greed takes over from common sense. Listen to the voice of reason and stick to your plan. there are no emotional elements in plan so let it be in control. If you can keep your emotions away from your investing and you won’t be consumed by fear that you’re going to lose or greed in the hope you’ll make a whole heap of cash.