The Role Of Your Investment Attitude

Most people usually think as to what is the reason that few people are able to make it in the stock market while others can’t. These people then usually sigh and then say, “Well, they’ve luck on their side, that’s the reason”. It is true that luck can be on factor in the success or the failure of a person in a stock market. As most veterans of the trade say, stock market trading is similar to the gambling. There is a large amount of risk in both. However, unlike gambling, failure or success in the stock market is not solely dependent on the luck. It has much to do with the attitude and the two things information.

It is really true that information has a large role in failure or success in the stock market. First, all the information which is available makes the trading in stock more of a work than guesswork only. The detailed analysis helps in educating the investors and making them more responsible in making their investment decisions.

An important thing which usually goes unnoticed is the correct attitude which the investors much have for the investment they intend to make. Many times investors fall for wrong attitude while making investments. These usually lead to faulty decisions and some impulsive selling or buying. Now what these attitudes are and how can you avoid them?

1. Most investors are impatient to get rich within a shortest time. Though unfortunate but true, many people making investment just get into an impression that they can become rich overnight by making few investments. This is false as successful portfolios buildup requires patience and time. This should be understood as investor might get discouraged on not reaping quick benefits and would like to sell shares at a lower price to exit in loss.

2. Some investors do take risk to become millionaires in the shortest time. Warren Buffet, who was most successful with stocks cautions that investors should not bet all their marbles on stocks which are soaring today as they can tumble down tomorrow. He says that he built his empire over a long time on stocks which were stable and showed growth over a long duration of time.

Many investors just fail to include diversification in their portfolios. Depending upon the risk taking capability of a person, he should strive to divide his portfolio into the high risk, medium risk and low risk categories and make investment in these types of stocks. One must choose an attitude which is just perfect for his risk tolerance capacity.

Leave a Reply

Your email address will not be published. Required fields are marked *