Category: Money tips Release Date: 2007-04-22
Vagaries of the securities investment market, frequent convertible led to the failure of our investment decision-making is one important factor. While the actual combat to suffer "double slap in the face" of the Code, cases are numerous, but day after day, the tragedy still continue to continue to play. Why is this? From the perspective of behavioral economics, "conceited" psychological trigger is the culprit of this epidemic disease.
First, symptom: misjudgments, frequent convertible, the effect is minimal losses
Behavioral economics researchers found that: the people shown in the stock market, "conceited" (over-confidence) Psychological is a very prominent and interesting. First, let us look at an "investment expert" performance "pay" example.
Beginning of each year, as usual, the major fund managers who want to do a whole market trend in the overall pre-judgment. In the absence of making a limited range of circumstances, the majority of fund managers in a relatively narrow range of years to make a choice, but very few people can make with the right range of estimate. For example this year, although due to a number of (good or bad for) the existence of uncertainties, and the prices in the end no one knows how to develop. People's expectations may be beyond the 800 points to 3000 to run between points. But almost all of the fund managers are given the answers are strikingly similar to the 2000 --- 1300 point to box to run between points. Other factors and specific motives aside the impact of purpose, should we not be able to discover how this is a "conceit" a concrete manifestation of the psychological do?
"Financial expert" like this, ordinary investors, "conceited" psychological shown even more vividly on the. As investors, compared with the experts in the "capital, information, technology" and so on in a weak position of the individual, in the daily investment is not willing to admit that they know little about, very willing to "accurately" determine the future trend of the specific point position and the stock price run specific. And even, sometimes, was able to because of their subjective judgments of a few cents a fraction of the interests or to risk being stuck with a substantial depth, "Ta Kong," the risk of frequent swap operation!
However, the reality is: This is due to "user pays" mentality "precision" to determine the accuracy rate is low and pitiful.
Behavior of well-known Wall Street economists Aodan Deng had several pairs of the operation of securities investment funds and the corresponding turnover rate of return over the long-term follow-up survey. The results showed that a relatively long period of time where the most has a "confidence" of investors (as conceited and frequent operation) of the annual income is around 10%, far less than the relatively less "confident" investment 18.7% of the average annual rate of return.
Second, recipe: To evaluate the analysis, see more small animals and firm belief, rational investment
From the above facts we can easily find conceited and frequent convertible for the investment decisions hazards.
In fact, we should know: For many complex factors by the constant fluctuations in the stock market's future trend, in that they are not shown when it is very difficult to make clear judgments, investors --- especially in the "capital, information, Technology "and other areas in a relatively weak indeed ordinary investors know little about. So, assuming you are not a super-short-term expert, should not overestimate their own ability to bring long-term view point. Do not make profits, runs the risk of. And should resolutely abandon because of "conceit" the frequent psychological cause it to trigger swap operation, in order to avoid blindness in the investment process as much as possible make fewer mistakes.
In actual combat, first of all it should be noted: In a trend prior to the formation do not act rashly; Secondly, in the trend of the formation of the early kick the greed and fear of interference, the flow of. Once the trend changes, you should calmly observe the analysis, see more little move, not to blindly buying and selling stocks. Specific to the current stock market run in practice, because if you are involved in certain hot spots and the early inadvertently stuck with a short head, you also have to present a "stable development", be aware of the background of the big market. And determine that in a medium-term trend in the current point position is still relatively low status. Once you find your stock holdings have more upside, they can be held fixed to reduce the swap operation because of frequent arising from unnecessary losses.
