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Sunday, December 2, 2012

Emotionless Investing:

Investor’s biggest enemies are not the volatile markets / unstable government / lack of reforms, but their own emotions. In many occasions, they are tempted to make investments when they SHOULD NOT HAVE made it and in other occasions they prefer not to invest when they SHOULD HAVE made it.

Theoretically speaking, an investor needs to:
  • Invest when Purchase Price is ‘Cheap’ / Valuations are ‘Cheap’.
  • Keep Investing (adding) as the price gets cheaper.
  • With each price fall, you should be investing more for better Return on Investments.
  • Invest with specific target price (profit) in mind and ‘Blindly’ sell when your profit reaches.
  • Have clear distinction between Long Term Investments and Short Term investments.
  • Invest only in Top Class companies with proven track record and good management.
  • Not invest in penny stocks / fancy stocks (not to chase stocks) which may fly high due to media publicity.
  • Above all – Research - before you invest – Not after investing.
All these facts are known to everyone. But when it comes to practical implementation, it is definitely difficult – all due to emotions. Investors turn pessimistic when no one is investing and Investors are hyper-optmistic (euphoric) when everyone is investing. By and large, Investing happens to be a ‘mass mentality’ process.

To overcome this 'EMOTION' problem, we need NEUTRAL, Unbiazed Strategies. At EASY Investments, we have deviced Investment strategies for specific requirement. Some of them may fit your requirements. Hence read our specific articles on following to know more:

1 comment:

  1. Nice blog that every one must read in this fluctuating environment...Vignesh

    ReplyDelete