« Bears control the day and the week as stocks lose more ground | Main | Weekly Earnings Preview for November 12th-16th »

Nov11
Keep your emotions in check when investing

There are professions and hobbies in life where being emotional can help you, but investing is not one of them. I simply cannot stress enough how essential it is for an investor to keep their emotions under control. This past week is a perfect example of a week that can lead to a lot of money being lost because an investor gets too emotional. wall%20street%20sign.jpg

When you look at your trading screen and see the Dow plunging by 100 points in less than ten minutes it is a fairly common reaction to think sell right away. In the same way it is human nature to buy when stocks are going up each day. The problem with this strategy is that quite often, investors make the wrong decision when letting their emotions get the best of them.

Investors have to program themselves to be very rational and think things through before making any move. Realize that quite often as the market plunges lower, capitulation sets in. Capitulation defined means the point of surrender or giving up. Hence market capitulation is the point where many investors all at once decide it is time to give up and sell out of their stocks. These investors generally decide that they simply cannot stomach the losses they are seeing in their investment portfolio. When significant market capitulation sets in, history tells us that the bottom for stocks is near. A rational investor is likely to have the ability to buy stocks when these emotional investor are still selling out because they see the market plunging.

The moral of the story is that next time you watch your favorite business news network and hear from all the strategists that the market is doomed and you should get out now, think it over rationally. Its the famous Warren Buffett who coined the great phrase "be fearful when others are greedy and greedy when others are fearful."


0 Comments/Trackbacks




submit a trackback

TrackBack URL for this entry:

post a comment

Name, Email Address, and URL are not required fields.





Comment Preview

« Bears control the day and the week as stocks lose more ground | Main | Weekly Earnings Preview for November 12th-16th »

Advertise

Related Resources

sponsored ads



Incredible Hall of Acclaim.

subscribe


Prefer Email?
Subscribe below-

Enter your Email:


Powered by FeedBlitz What's this?

Current News

Support This Blog

business social media

Use these fast growing business social media sites to promote your business, feature your products, spotlight your business leaders, create links, and drive traffic back to your company site, all for free!

BIZZlogos - Add your logo - free link to your site
BIZZphotos - Add photos of your products and people
BIZZprofiles - Submit your profile and build your online visibility
BIZZspotlight - Spotlight your business with free links
BIZZvideos - Videos about businesses, products and business people.
BIZZbites - "Digg" for Business - Submit your articles and posts

know more media network

View Network Map

Network Feed List (OPML)

Know More Media Network
Feed


we support unitus

PRWeb

Influencer



GrowYourFunds is a member of the Know More Media network of business related blogs.

Here are some current headlines from some of our business publications:

ProductivityGoal

CallCenterScript

AdHurl

TheBizofKnowledge

LandingTheDeal

CustomersAreAlways

HealthCareVox

WebMetricsGuru

TheInsurancePolicy

MarketingBlurb