Category: Money tips Release Date: 2006-02-27
Wall Street, saying the old adage, "there are two forces to push the market: greed and fear." In fact, greed is not a problem, greed is not greed, after all the judges, Buffett also want to make a lot of money, but the result of his success, so no one said he was greedy. The fear is the investment among the basic emotions, including fear, greed precisely. Greed is not afraid of the fear of the time, not the time to fear but fear. Shows a lack of understanding of the market investors can not be a good way to manage their emotions.
â—?psychological contest
The Central University of Finance and Associate Professor, Department of Sociology, psychology, teaching and research director of economic Weng Xuedong that "the so-called investment activities is to make the value of existing assets, but make a read in between the lose, so the role of psychological investment is too large. Price the formation of a mechanism to decide that when the oversupply, the price drop; for less than demand, the price increases. in actual investment, professional investors and non-professional investors to judge the market is inconsistent. price changes, this is normal matter, while investors suffered in the price changes will lead to the psychological experience to make decisions. Because it is a virtual economy, the price will be around the greater fluctuation in value. On the other hand, the value of their financial assets more difficult to make accurate estimates, This is the price of creating the conditions for speculation. When a stock is expected to well, a lot of people buy the stock, in such a warm atmosphere, the market reflects the people's psychological changes, the same will also affect investment decisions, prompting people to continuously improve the expected . While the fundamentals of listed companies may be no changes, different investors have been conducting a psychological battle. Investors pessimistic about the extreme, the stock price will rise; optimistic about the extreme, there would reverse the decline. Some people will adapt to market changes in a timely manner, while some people have always believed themselves, no adjustment. As the people's investment behavior is not entirely rational, therefore, sophisticated investors in addition to master the laws of the market, but also understand the psychological state of investors in general, and their own psychological weaknesses in order to invest in the different stages vary to take a different strategy for investment operations. "
The United States has been done such a study, the background of psychology and economics background to compare the securities trader and found that the operation of the former performed significantly better than the latter. Investment activities, fundamentally speaking, this is a psychological game, it's also a Personality continuous improvement process. "The smaller the psychological conflicts people, the greater the likelihood of success."
â—?carry the line of Misunderstanding
As the large number of retail investors, do you encounter the following errors.
1. Disposition effect --- in the Western behavioral finance theory, there is one called "disposition effect" investment psychological phenomenon, that is, those who speculate in stocks, but stocks tend to benefit cash settled, while the quilt holds shares in the hands. In other words, is the holding time for the stock profit is too short to hold quilt stock too long. "Run away all that a dark horse, but stuck to all of which are garbage." This is a common problem for investors.
2. Mindset --- "The market has its own cycles, a rising phase followed by a decline phase, and a decline phase followed by a rising phase. Yesterday, the success of future investment experience may be your lesson of failure; Yesterday failures may also be in the future is your best strategy to make money. "
3. Cognitive bias --- the new investors enter the market expected a higher return on investment, while the underestimation of market risk. While some experience of the investors are prone to cognitive biases, they are easy to over-reliance on their own past experience, ignore the new changes in markets. For example, if they can find a stock's fundamentals and graphics with the previous paragraph is only impressed by the stock of a like, they think the stock will follow the stock moves past, the reality is very much different.
4. Attributable to preferences --- they are often attributed to the successful operation of their abilities, do not think that the market and the environment to the opportunity to make money; while failure attributed to objective market, there is always another place to find a cause, long-term so, would result in overestimation of their own earning power, resulting in excessive self-confidence, and thus frequent trading.
5. Society of short positions --- Few investors realize the fun of short positions, and many investors a little money in the hands or accounts to buy into the stock. As China's stock market is not short-mechanism, and only holding up to make money, investors gradually got used to at all times to hold the stock. In fact, short positions are sometimes the best strategy.
â—?stock market like a battlefield
Many investors may have such a doubt in the investment market of the hearing who is it? "Of course, their own, professional advice should also consider." Weng teacher no doubt reply. "Is just most cases, investors should not have to listen to when you listened to the opinions of experts, but not heard at the hearing Shique. For example, experts recommend a stock, investors began to doubt, until the stock price up very high, only that the experts are right, was determined to buy their own. just bought, stock prices began to drop. This is like the battlefield and waste of the fighters, there is only failure. experts also make mistakes, for the first time was wrong , the second may also be right. expert to determine the correct rate is constantly changing. "do not follow common sense, according to the specific situation depends on the cards, in a trend to run into, according to conventional operation; most extreme case, the anti - to the operation.
Some people say that investment is the perfect combination of science and art. Without the time to polish the prestigious universities of the elite business school can not become the best fund managers, the same, there is no theoretical basis for the general investing public armed difficult long-term winning in the market. Let in the market, polished long-armed, under your theory, "money" passers-bright!
