SWhat are the common mistakes of investing in the stock market? And how to prevent these mistakes in the stock market?
He deceives himself.
My friends and I have been discussing investment methods with another group for a long time, and during this time we have been working together to come up with investment strategies that might be a step towards expansion. Cooperation.
What exactly were they doing?
They did something that was very interesting to me and my friends.
They spent a lot of time analyzing the stock of companies and were really successful in their work.
In other words, most of the investment opportunities they identified were true and valuable.
It was enough to be in their company for a few minutes, to learn very valuable tips and content from them.
They had enough knowledge to move in the stock market in the best way.
But they had a fundamental problem.
What was their main problem?
If you look at the profit and return of their team, you will find that this amount of profit and return has nothing to do with the amount of their skills and efforts in the stock market.
This was very strange to me. I asked their team manager why, despite your skills, you have not achieved the desired level of profit?
He just answered the reason
When I told them that our team, with a third of the energy you spend, earns a lot more than you do. They replied, "We know."
It was something I realized they were hiding from me while they themselves knew it well. I told their manager that if you tell them what is the reason for your low return, I will tell you the reason for our high return.
"I'm both scared and very greedy," he said
The answer was very strange and I just listened. He said he and his team look at stocks best and identify opportunities precisely.
But their problem is that they do not do it exactly when they have to buy or sell. And in practice all their effort is lost.
They suffer from two diseases
One is "fear." After analyzing, they find that a company's stock price has been falling for some time.
They know full well that this is the best opportunity for them to make the most profit later by buying a stock that has fallen in price.
They understand the opportunity well, but the same "fear" prevents them from taking action. In this way, they are afraid that after they buy the stock, the stock price will go even lower and they will lose.
The second disease is "greed"
In addition to being afraid of lower prices, they are also greedy to let the price go down so that we can buy at the lowest price, and in this way our profit will be much, much higher.
This is why the team does not make any purchases while the price is in the low range, and these two diseases prevent their fear and greed from doing so.
Suddenly, one day, hoping for a lower price, the price starts to go up, the demand for stocks goes up so much that their team does not get a chance to buy, and on the other hand, those who have already bought stocks, Now they do not sell it easily.
The same team is ready to buy shares at a very high price every day, but unfortunately, the opportunity has been lost.
The best and most professional investors buy exactly when no one is buying and sell exactly when everyone is queuing up and the price is high.
The team's problem was that they could not overcome these two factors, "fear" and "greed" and use their skills in the best way.
The secret is that when you recognize an opportunity, you close your eyes and act and do not get involved in "fear" and "greed".