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Its not necessarily poor investor behavior. Poor investor behavior is selling after a stock goes down, not up. I'm selling after stock has gone up most times.
selling after a stock goes up can still be poor investor behavior.
i just did a quick calculation of my investment assets and savings. so over the past 14 years i have saved and invested money. as of today, my investments make up about 47% of my brokerage account's value while money that i have saved makes up 53%. so by diligently investing my money and trying not to act incorrectly i am in a situation where almost half of my investment assets is appreciation in investments.
so it has worked as i see it and im sticking to the plan, like i said before.
Last edited by CaptainNJ; 07-10-2018 at 10:42 AM..
This is a clear example of not using a risk management strategy for your individual allocations. Before you enter a position you should determine how much profit or percentage your strategy is targeting. From there you can use other techniques such as trailing stops to mitigate moves within your timeframe & manage profit (s). This would stop the anxiety around upward & downward movement. Especially with the, it will eventually go up thought process.
Good luck.
That works if one is using ETFs or buying individual stocks. Can't do stops and limits with mutual funds.
Anyone else like me? When I buy and it goes down, I just tell myself it will go up eventually. But when I buy and it starts going up a decent amount, I'm afraid to stay in because I think it will crash back down. Kind of like the last 2 day rally. Now I'm really anxious for a big down day because it just went up a decent amount.
What you're experiencing is part of behavioral science: loss aversion.
Studies show that the pain of losing is psychologically about twice as powerful as the pleasure of gaining. You're anxious because you're anticipating the pain of losing.
Or put another way, people tend to favor not losing $5 over finding a $5 bill on the street.
Anyone else like me? When I buy and it goes down, I just tell myself it will go up eventually. But when I buy and it starts going up a decent amount, I'm afraid to stay in because I think it will crash back down. Kind of like the last 2 day rally. Now I'm really anxious for a big down day because it just went up a decent amount.
This is a big waving red flag that you're watching the market way too often for your own good. Do you consider yourself a long term investor (long term meaning for the next decade at least)?
If yes, you need to discipline yourself to stop watching what the market is doing each day. Only look once a month *unless* you are making specific shorter term trades. If you really want to be bad a$$, only look quarterly and adjust when you need to.
Get busy with other things in your life, people, interests, not money; assume you will have enough money to survive and thrive over time. Do you have a budget you follow, generally? If yes, stick to that. If no, put one in place that is reasonable and follow it.
I know of no other way to manage what you describe other than being in a coma.
What you're experiencing is part of behavioral science: loss aversion.
Studies show that the pain of losing is psychologically about twice as powerful as the pleasure of gaining. You're anxious because you're anticipating the pain of losing.
Or put another way, people tend to favor not losing $5 over finding a $5 bill on the street.
You didn't comprehend my post. I said it get MORE anxious when my stocks are going up than WHEN THEY GO DOWN. I should be more anxious when losing than when anticipating losing.
selling after a stock goes up can still be poor investor behavior.
i just did a quick calculation of my investment assets and savings. so over the past 14 years i have saved and invested money. as of today, my investments make up about 47% of my brokerage account's value while money that i have saved makes up 53%. so by diligently investing my money and trying not to act incorrectly i am in a situation where almost half of my investment assets is appreciation in investments.
so it has worked as i see it and im sticking to the plan, like i said before.
Well selling anytime can be good or bad investor behavior. I just depends on what happens after.
Well selling anytime can be good or bad investor behavior. I just depends on what happens after.
well, if it depends on what happens after then it is a matter of luck. if it is good behavior then it is part of a sound long term strategy that doesnt change with the wind.
You didn't comprehend my post. I said it get MORE anxious when my stocks are going up than WHEN THEY GO DOWN. I should be more anxious when losing than when anticipating losing.
I understood your post perfectly. Every word.
Your anxiety stems from a fear of losing. Period. There's a lot of science behind this.
Your anxiety stems from a fear of losing. Period. There's a lot of science behind this.
MY question was why am I less anxious when I am losing money when its going down and more anxious when it is going up and I am making money.
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