Winning or paralyzed by attitude?
Are you attached to an investment? The attached, stubborn helpless investor is one paralyzed by attitude. They are not capable of managing investments well. This lesson discusses the challenges of attachment, stubbornness and helplessness. Those mental blocks stop investors from making good decisions.
This lesson 7 continues the Market Mind of Superior Investors course with discussion of more emotions and the psychological aspects of investing that are central to investing success. Links at the end guide you to related content if you want to learn more.
Attached investor
3. Attachment: Falling in love with a stock because we ‘know’ it is great can be costly. Even stocks that have always treated us well in the past can be dangerous. The danger can hurt our wealth and liquidity. Don’t get attached to any stock or investment.
Solution: Think of hiring each investment. It has a job to do. That job is to make you money. Keep them working for you as long as they are doing their job. When they slack off or worse, they begin to steal your money, let them go. Values that are going up are good. Values going down are bad. If an investment is going down sell and move on. Get off the bus when it stops heading to your destination.
Stubborn investor
4. Stubborn: When a stock we picked does not do what we want; you can begin to play mental games. You can get into a mindset that rationalizes investing in that stock because you ‘know’ it is good. When the market is telling you otherwise your investment is not doing the job you hired it to do.
Solution: When the evidence says we picked the wrong stock, sell. Admitting we made a mistake and accepting that the market is right is tough.
We own the decision to buy. But by being stubborn and holding on to a bad investment can eat savings and chew a huge hole in our bank account. Sell and move on to make money elsewhere.
Helpless investor
5. Helpless: The high volume of stock market noise can hurt more than your ears. It may hurt your money! Frantic breathless reporting from trading offices can make an impressive racket. Fever pitch commentary and urgent predictions of doom can stun an investor.
Listening to a book talker can cost
Most often you are witnessing media manufactured news and issues. Many of the experts are people talking their book. That means they present and rationalize the positions they have. Too often they are not presenting balanced reports. Expressing opinions as facts misleads viewers. Often the commentary slant or spin presents only their specific point of view. They are “talking their book” or pushing the investments they hold. They hope you will also buy shares in the same company and thus support their investment. But that may not make you money.
Such interviews often are more promotions than balanced information. When you see and hear of all these informed, smart people acting with conviction. It makes you feel you must do something – now – but what?
That media din builds audiences of eyeballs frozen to the screen. That is the purpose. All the more to watch advertising. That pays the bill for broadcasters. From their point of view that is success, and all good.
Solution: That media din can do little for you until you know the game. Most of the time doing nothing is the right thing to do. Remember, if you are investing you are in for the long haul.
Listening to short-term traders can completely confuse and mislead you. Don’t be the attached, stubborn and helpless investor. If you are in for the long haul and objectively not much is really happening, do nothing. If your mental stop has been hit, sell. End of issue.
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Market mind of superior investors, lesson links:
Introduction to Market mind of superior investors Lesson 1
Thinking investors grow money Lesson 2
Girls make winning investors Lesson 3
3 Wealth assassins lurk Lesson 4
Irrational behavior in normal markets Lesson 5
Mental blocks paralyze returns Lesson 6
Attached stubborn helpless investor Lesson 7
Optimism and unrealistic investor minds Lesson 8
Muddled minds harm investors Lesson 9
Next lesson 8:
Optimism and unrealistic investor minds lists 4 ways investors succeed. They get help, learn, assess risk and set goals to get superior investing results!
Have a prosperous investor day!
Bryan
White Top Investor
[email protected] WhiteTopInvestor.com
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