How do you make your Investment decisions? Well, this article is not about the technical terms that are being used in accordance with the term investment. Rather, it concentrates on the social part of every investment. Interesting? Read on!
While making some investment decisions, we like to behave in certain ways. Besides making the basic research before investing, we like to generate references for the same. This article is all about those social aspects of investment and focuses and how it can help us to make some better investment decisions.
Nowadays, almost everybody owns stocks (including you of course), in different forms like pension plans, mutual funds, stock ownership funds, brokerage accounts etc. Everybody likes to talk about their investments in a social format. Whether it is in the workplace, online forums or even on a phone chat, people like to discuss it. Especially when you a newbie and out in the market to invest.
Earlier, investment decisions were made according to the advice of the full-service brokers. Now, it has been totally replaced by many other options. You can easily get some useful advices from your favorite financial website/s. Numbers of people are discussing about the investment online. Experts are continuously giving advices on various investment opportunities. Here pops up the question – why should we listen to those people? The answer is quite simple- Investment is not an easy task and expert plus reference tips really help. Even the analysts use the price ranges for their expectations, not the price. Then how the common people can make some decisions themselves?
This is why the concept of socialization is valid in investment. Comments of analysts, newsletter, and news channels are thus helping the common investors to make some really good decisions. This has actually created a social pressure to move towards a particular direction. We can’t ignore the voice of those experts and act according to their suggestions.
It all creates a mentality to move with the crowd. There are both pros and cons of doing this, but, in fact, we can’t avoid this; it’s in our psychology to go with the herd. We act in such a way because we don’t want to be left behind. This is the reason why we continuously check the news updates, search online if there is any change in stock market and this is one of the reasons why we are desperate to get the fastest connection.
It is a common belief of the investors that moving slowly in investment is definitely a call to death. The socialization of investment is therefore playing an important role here. If you are not getting the news fast, there is no need to worry; your friend must have got it.
The investment clubs are also a result of socialization of investment. In these investment clubs, groups of people come together, pool their money and invest in the stocks. Investment clubs may consist of co-workers, friends or even family members. These clubs create an environment for learning and in the same time get some good returns on their investment. It helps in making better group decisions.
This is how we react socially while some investment decisions are being made. These things are important to all of us, because if we know how we react in a particular situation, then we get the chance to avoid the negative ones while making the next decision.