Many innocent investors get lured by greed to the stock markets. They are high on the fear and greed index. Most probably they have not had the opportunity to read the classic work on investing by Benjamin Graham, "The Intelligent Investor", yet. They still have to learn the Warren Buffet way of investing. They have to learn to slay the two emotional demons of greed and fear.
When the market is rising fast
and is already highly priced, people innocently enter the stock market, purely out of greed, without having armed themselves with the true knowledge of value investing, expecting the market to rise even further, and not wanting to miss out on the opportunity to make a fast buck.
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| Slaying internal demons greed and fear key to investing success |
Most probably they entered the stock market just when it is about to crash. No wonder, soon the market crashes.
The very same people who were ruled by greed sometime back, are now
gripped by the other emotion, fear. Fear
of loss. They sell their stocks to get out, at any
price, fearing even further fall.
In order to be a successful
investor, one has to learn to slay these twin emotional demons with the powerful sword of “Sa-Vidya” or true knowledge of value investing.
Armed with knowledge, the value investor is happy both during the market crash as well as the market boom.
Knowing that the intrinsic or real value of the shares she holds, is much higher, she will be
happy to buy more when the market is
crashing and sell them, and make a
handsome profit, when the market is booming.
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