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The feeling that one may sustain losses when stock investing is sometimes even stronger than one feels enjoying high rewards. It has been proven by several researches that people tend to remember better the negative feelings of losing money from investing in the stock market than the positive ones associated with making profits. So, you should be very careful how to take investment decision, so that you do not waste your money. The bad feelings associated with losing money quickly enter investors' minds, which can result in blurred and emotional investment decisions.
How To Avoid These Situations?
Avoiding such situations includes the establishment of a plan of action before embarking on investing and sticking strictly to it. Our emotions can lead us to bad decisions regarding investing. Thus, being an emotional investor can play a bad trick. However, being an emotional investor is not an indication that one will not be a successful investor. Neither does it mean that the individual is unable of making viable investment decisions. It just means that people allow emotions to enter decision making, sometimes consciously sometimes without realizing it. There are people who do not know anything about share tips. It is always advisable that an investor makes a plan before he embarks on investing and stick to it with the required discipline. A sell point should be included as a part of his plan, which represents the point up to which he can keep his stocks.
Other considerations an investor should make include a realistic view on the fluctuations of the stock's price as well as the lowest point, which the stock can reach under different conditions of the market. As part of an investors plan one should include an exit strategy that includes a sell point, which if reached will trigger the selling of the stock in the Indian stock market.
So, it is very important to know how to take investment decision. The plan should be so constructed that it excludes the possibility of making too hasty or late selling as well as it eliminates emotions from his decision making. An investor should be also aware that selling too soon and selling too late are sometimes difficult to determine. However, different strategies can be implemented to eliminate such occurrences.
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