Consequences of Fickle-Minded Investing Behavior
By Micheal James
The results arrived at by two investors after research and analysis of the share of a particular company may be the same, but their emotions can never be identical. It is observed that investors react differently to the market volatility. Greed for more profit is an inevitable part of the share trade. The exercises in the share market are for the purpose of earning as much as possible and as quickly as possible. One sees the marked competition between the traders, and each wishes to outsmart the other. When the market is in full swing, and the Bull Run is on, the investors are enthusiastic. The targeted share becomes more and more expensive, day after day, and you find it difficult to buy. Correction creeps in quietly, the selling spree begins, the fickle-minded investors do not know whether to retain the share or to sell, and by the time they arrive at some decision, the prospectus of big losses loom large.
A professional investor is not unduly perturbed about the volatility of the market. He knows when to buy, when to sell, when not to do any trade and wait for the conditions to settle. The term investment should not be equated with speculation or gambling. A good investor makes hurried investments, when it is necessary to hurry; he knows when it is not necessary to hurry, there is always a favorable tomorrow to do trade. Having entered the exchange or while in front of the computer screen, one should not proceed with the feeling that some trades must be put through! Profits will not come out of forced approach. They will come when you understand the market trends and invest accordingly.
With fear and fickle-minded approach one can never be a successful investor. It is a peculiar situation, the results of research and analysis takes the back seat when the market is on the downslide and fear takes over. When it is moving up, greed takes over. Both these approaches to investment are wrong. The factors for decision making are something else. Strange happenings in the share market beat all calculations and they should not be taken seriously, because no expert has ever been able to make out why share market behaves the way in which it behaves. Instead of questioning its movements, it is better to fall in line with the discipline dictated by the market.
Do not give your emotions, undue role to play in your investments decisions. Instead of conducting the exercise on uncertain premises, try to acquire details about investment opportunities and profit performance of the companies, and include their shares in your portfolio. Your profits will reflect your study-linked performance. They are not based on how strong your emotional waves are!
An investor has to grow and survive in the ever-present volatile conditions of the market. A tough and straightforward approach, respect for rules of the game and investment discipline, are the important factors for success. This is not the place for an individual with the wavering mind. Investment decisions in share market are complex. A weak mind will only complicate the issue further.
A fickle-minded individual bent upon to achieve success in the share market, needs to control his tendencies of uncertainty by availing the services of a broker or financial consultant. Picking up the shares for the portfolio is an art. The experienced broker, who is also well-versed in the art of stop-loss, will protect you from a hopeless scenario in the market.
Watch with confidence how your portfolio grows, as the broker juggles with your shares to earn profits for you. Understand how he is taking calculated risks to give you those returns. Educate yourself by reading share market news from magazines and the internet sites. Each day, you should emerge wiser and stronger and ultimately you will be able to subdue the fickle tendencies of your mind.
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