By Logical Patient Sock Market Investing Over Emotional Panic
You buy shares in a stock and the price falls. You by more to lower your average. And the stock falls further.
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You have run out of money or you have more money on standby, but fear enters your mind and overcomes you so that your mind is numbed as if you’ve been anesthetised; as if your lover has walked out on you.
You forget about all the good reasons why you invested in the stock in the first place. You forget about your target price.
You forget that you can’t always buy at the bottom.
The company are continuing with operations, sales of products and/or services, but you are overcome with emotion and panic that you sell all your shares and lose all that money you were down on.
BIG MISTAKE in my view
You can’t ALWAYS be up on the stock from the moment you buy it. And if this is what you expect then you can’t be an investor in the stock market.
You need guts and you need to be logical and patient.
Rome wasn’t built in a day and if you sell out and lose many on a potential future Amazon type of a stock, you will forever regret your BIG mistake in the future. You’ll kick yourself so much this will affect your life.
Stick to your guns, and imagine the stock price recovering to the price you paid and going up more than the price you paid.
It might take many months or even years to go up and generate a profit for you.
But the bottom line is investing is all about time, so in the long run, if you do your research, pick the right stocks, they should do well.
Hold on to your shares
What is the worst that can happen? The company goes under and you lose all your money you invested in it.
Well in this case, if you are all above board with your taxes, you just claim those losses back in your tax returns.
Of course if you want more certainty then stick to a tracker fund, top 50 stocks, top 100 stocks, and invest in a few different tracker funds, including low cap, and penny stocks.
You could invest 20% of your investing fund into small stocks, and 80% into the well known top stocks.
Then when these fall you could top up buying more.
It’s a great investment strategy tracker funds because when a weak company drops out, it is automatically replaced by another emerging company.
And you get that dividend income
If you want big profits on the other hand then you have to learn to adopt the stomach for the big downs.
Stock market investing is a game of logic, common sense all in time, within its own time, when the stock is ready to do its thing, not when you want it to go up.
If you apply more logic and less emotion and you don’t allow time to bother you, you will be a great investor and make lots of money.
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