Investing Advice

Avoid Psychological Traps to Have Successful Investing

From time to time, even the most successful investors will hit a losing streak. When this happens, people have a tendency to fall into these psychological traps:

  • Making investing a full-time job: spending hours each day trying to beat the market and make their money back
  • Denial and rationalization: watching your stock fall and refusing to accept that it’s going to fall further. Trying to explain away bad decisions and bad market situations.
    • Avoidance: delaying actions, like selling a stock and taking a loss or buying one because the price is “too high”

    • Projection of blame: blaming someone else for your bad decisions, not taking responsibility for your mistake

    • Idealization: putting your faith in a particular stock or the opinions of a financial guru and following them blindly

    • Burying your head in the sand. This can turn into wishful thinking where the investor begins to believe his own fairy tale

    Sometimes it's good to have a trusted friend or advisor evaluate your investing habits and the way you react when your investments are not going well. Sometimes you've got to take a step back and take a serious look at your investing style.

    Other Stock Market Basics Topics:

    1. Stock Market Investing – the Right Way
    2. More Stock Marketing Investing
    3. How to Pick Winning Stocks
    4. The Golden Rule of Investing
    5. Avoid Psychological Traps to Have Successful Investing
    6. Changes in Stock Values Can Be Big Numbers
    7. How to Invest Smart
    8. Stock Advice - Important Selling Rules
    9. Poor Stock Buying Decisions
    10. Market Indicators
    11. Stock Market Cycles
    12. When a bear stock market may not be a bear market
    13. Stock Index Futures
    14. Four Things that Affect Stock Valuation
    15. What is a P/E ratio?
    16. Value Investing
    17. Cheap Stocks
    18. What is a Financial Statement?
    19. Analyzing Financial Statements
    20. Stock Market Tip - Red Flags to Look For When Investing?
    21. The Annual Report – How to Read
    22. Stock Market Analysts – Stock Market Advice and Tips

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