We like to think that we are logical, rational beings. We evaluate the advantages and disavatages and try to make the most effective rational decision. However, when it comes to money decision, our emotions and behaviours predominate our brains. If you are thinking of investing in the stocks, ask yourself these simple questions first. They may give you a rough picture of what kind of investor you are. When you make an investment decision in the stock market, will you contemplate more on risks associated or more on return on investment?
This question is just same as whether you play to win or play not to lose.
In the stock market, you face the same situation. If the stock price is increasing, will you hopelessly believe that it would keep on growing? Or will you get anxious it might drop so that you sell all the stocks as soon as possible? Or are you a type of investor who just loses more when the stock value is falling sharply, but foolishly believes that it will pick up again?
Can you evaluate real facts from fictions and cut your loss just at the right time? Or will you make your investment decision based on someone else’s opinion? When you hear news on your stock investment and the circumstances are changing, are you adaptable to the changes or will you just stick to your old beliefs? Such situations arise when you invest in stocks and your personality and emotion play an important to role to your market decision.
If a good profit on stock comes from only well operating companies, then everybody would invest in them and be the winners. However, in reality even though you invested in a good company stocks you can still lose your money if you cannot control your habits and emotions and even may not realize your full profit if you cannot overcome challenges in the investment journey. Know your personality and learn to control your emotions. Financial success is more about mastering the mental game of money than about understanding the numbers.
Cite this Mind over Money Essay
Mind over Money Essay. (2016, Nov 13). Retrieved from https://graduateway.com/mind-over-money/