We Have Met The Enemy, And He Is Me!

When it comes to investing in stocks, most of us get excited when the market is going up. And thanks to our Greed, we buy when the market is near the peak.

And the moment the markets are down, thanks to our Fears, we panic and sell when the markets plummet. In fact we sell, when the markets are about to rebound!

And then we blame the stock markets and say it is infested with Sharks. We don’t realize that it’s our own Greed and Fear that drive us to our own doom.

Have you realized that it’s impossible to make profit when you buy high and sell low. Wouldn’t it be good if we are aware of our own Greed and Fears.

And being conscious of these primitive emotions will show you the way of being better, informed and disciplined investors.

One way is to be passive investors in ETF/Index Funds till you find your bearings as an investor. And it helps to know about a study that says that the average actively managed mutual fund investor underperformed the index by 3.4% per year for the 19 years studied.(From BogleHeads’ Guide To Investing).

Further, DALBAR’s update of its Quantitative Analysis of Investor Behavior (QAIB) study found that for the 20-year period, equity fund investors averaged 3.17% compared to 8.20% for buy-and-hold stock investors (S&P 500)

Are you prepared to be conscious of your greed and fear?

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