The Emotional Investor Part 2
If you're new here, you may want to subscribe to my RSS feed. Do also join our FREE membership where you will find tons of bonus marketing reports, cheatsheet and guides. Yep. 0 charge, 100% value. Join NOW!
Image Credit: BBC.com
I wrote the first part somewhere at the start of February, and wanted to post the follow up a few days later, but somehow this matter slipped my mind. It didn’t help I got so much other stuffs occupying my thoughts and time.
Never mind, better late than never though!
Back to the topic, psychology is a vital and very important aspect of investing. Overlook it, and be prepared to under-perform. The average investors out there are driven predominantly by greed and fear. Price fluctuations are all heavily influenced by emotional investors, as they make up the bulk of the market crowd. Yes even institutional investors are prone to making emotional and irrational market moves.
Some examples of irrational and emotional behavior of investors:
1. Investors hesitate to purchase a stock when it is an obvious bargain, but instinctively chase popular stocks to very high and overpriced valuations. They either probably think that it is too good to be true or it is just too ‘unwanted’ to their liking. The hot stock seem a ’sexier’ choice.
