investment psychology
March 23, 2009
To develop an investment planning, that are include difficult steps. Most investors are influenced by two main factors, namely greed and fear. When markets are in ferment, so investors fear.not sell at current prices increased but they sell when the price down.
Greed
Often occur, due to want to rush to get big profits, investors forget to think and act based on rational ‘instinct’ that was more emotional. For example, when combined stock price index increased from an 400-level for the first time and again to penetrate a 700-level, many new investors fear their greed inflame emotions.Unfortunately, not long after they buy shares, combined stock price index decreasing.
What happens? Because of the less of knowledge and investment patterns that are not appropriate an advantage but they get loss.Investors are influenced by information about the performance of an investment. The decision to receive the benefits based on past performance of an investment.
Fear (Fear)
When combined stock price index decrease(continued the story above), the emotional of new investors to switch from greedy to be Scared (Fear). As a result, they roll out of the market. So they do not buy cheap and sell expensive, but buy expensive and then sell cheap, that is loss.arise fear because of potential losses. Many research says that we are more dislike loss of instead of we love the victory .
In the case of monitoring the investment you have alocated and place will be better when you see every 6 months or 3 months. This can reduce your desire to sell (because of changes right) shares or stock-owned investment.
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