What is Causing Losses: Markets or You ?admin
What is Causing Losses: Markets or You?
You have started investing but performances are far worse than what you anticipated. You soon start to make losses because of the falling markets. At first, you ignored the phenomenon because it was a quick dip and would recover.
However, instead of recovering it kept going down and reached a point where your investments have suffered major losses. So in the fear of losing the capital, you withdraw the investment and watch until the market recovers. You have sold the stocks at a low.
When the market has slowly started to recover, you are also recovering from the losses. You anticipate that markets will go down again and slight rises do not change your decision to remain uninvested. From the slight rises, there is a stellar rise in the markets and this is the time you regret your decision to not invest when the rise was still moderate. At this stage, you buy at a higher price. Hence, the question: did you make a loss because of the market or because of your investment behavior?
To sum up the example above, the investor in question sold low and bought high. The classic investment mistake, which everyone wants to avoid but more people commit it. The investment education programs, blog, books and all other sources drill the fact that investors must buy low and sell high. Why do we keep making this common error? Who is then causing the losses? You have to decide…..Take our Experts Advice.
Take our Experts Advice.