Investors should purchase stocks like they purchase groceries, not like they purchase perfume.
– Ben Graham
What is investing psychology?
If you think that that investing within the stock exchange is all about learning the basics, graphs, charts, etc. but you’ll be surprised to understand that our investing psychology is more important while making critical decisions. Our investing mindset is the most powerful tool here in the stock market.
According to research investors are rational thinkers who take into consideration many considerations before making financial decisions.
“ The investor’s chief problem and even his worst enemy is probably going to be himself ”.
-Benjamin Grahm
The most common biases of investing psychology that we feature with us and which may have a nasty impact on our decision-making abilities are:
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Overconfidence bias:
There’s a skinny difference between confidence and overconfidence. Suppose if someone is saying I’m the simplest driver nobody beats me within the entire world that’s overconfidence that nobody is above you but once you simply say I’m an honest driver which shows you’re confident about yourself.
“The most beautiful thing you’ll wear is confidence.”
– Blake Lively
It’s an equivalent within the share market you’ll be confident about any stock/share supported by your study/analysis of that company but if you’re saying that tomorrow’s market value is gonna high or low that’s your overconfidence that stock. Because you can’t predict the performance of any share/stock.
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Mental Accounting:
We, people, have a basic tendency to try to calculate anything in our mind before doing anything good but only up to some extent only.
In our country, most of the people fall into the center class, and other people from this think tons and predict tons of things before starting any new task.
” Creativity is great-but not in accounting “.
-Charles Scott
You can believe it while investing but only up to a particular extent and this thing also by knowing the facts and what company do and within the future is there anything that company will survive or not within the changing era.
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Blindness Trap:
We believe too easily in people stupidly that we convince so easily. Like within the case of Harsha Mehta whatever he says at that point people want to believe him without asking any sort of inquiries to himself.
“A trap is merely a trap if you do not realize it. If you recognize it, it is a challenge.”
To avoid this blindness trap we’ve to find out from about before that, we’ve to research on our own before investing in any company or share.
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Framing:
Framing word seems very easy to know but it’s meaning is extremely deep. We sleep in a democratic country where with power high personalities frame anyone to urge benefited from them.
“Confidence isn’t optimism or pessimism, and it’s not a personality attribute. It’s the expectation of a positive outcome.”
-Rosabeth Moss Kanter
Like sometimes companies make a rumor through different platforms and confuse their shareholders therein situation people got framed and loose patience but we’ve to act smartly therein situation and keep ourself cool and without knowing the facts we don’t need to act.
Last Thoughts For investing psychology :
Successful investing is tough, except for that, if you won’t be a genius then it’s totally fine.
Successful investing requires something very rare: the power to spot & overcome one’s psychological weakness.
“ Success in investing doesn’t correlate with I.Q once you’re above the extent of 25 you’ll do great in the stock market market ”
Warren Buffet
MK Stock Talks is a startup in the field of professional financial and educational services strictly related to the stock market. We have the objective of building financial discipline in the masses by simplifying Stock Market Education and Financial Concepts.
Our leader Miss. Manpreet Kaur is at the forefront of this mission.
You can check out our courses, we are providing full training in TECHNICAL ANALYSIS and FINANCIAL ANALYSIS with full assistance in Realtime trading sessions.
ONLY PATIENCE ACHIEVE SUCCESS
Miss. Manpreet Kaur
