Category: Money tips Release Date: 2006-11-06
I was last week's "real experience" column refers to "bargaining chip to bring it is maintained," the so-called long-term point of view held, causing a lot of investment in a friend's resonance, but lamented in practice difficult to achieve. Indeed, to really do this is the need to do some effort.
When we embark on various aspects of research concluded that: the fundamentals of a stock's future have a greater change, performance will be a continuous increase significantly, it was decided to buy and hold. If the fundamentals have not deteriorated, which means the development of the company itself is still expected their own, it has been held longer period of time such as two years. That which we can manage it, but the result is often the final price actually rose to their originally anticipated, but the price of chips has long been its own discard.
We did not insist in the end, because there seems to justify all kinds of reasons. Now we want to find out what really causes us to lose confidence, so that subsequent operations can adhere to in the end.
Some of the more common reasons for throwing chips
Reasons â‘? broader market fell.
Here, referring to large cap stocks in decline does not mean economic collapse or fall under the influence of the financial crisis. We seem to agree with such a truth: the same broad market stocks also fell down, but fell more or less just. This sentence can be said that a decade ago is correct, but in recent years have been quite accurate, and will later be proved wrong. Since we now believe that this sentence, so once the tape out of the adjustment in this situation will spur the sentence began to shake their confidence in the "buy them back later or continue to reduce costs," the subconscious stimulation eventually sold his own The long-term chips, will be "long-term hold" has become a "short-term short." Finally may find that stock prices did not fall with the broader market, or even if there is some decline but it has not bought back stock once we had recovered to the original selling price above the other. Such a "short short" have become "long-term sell."
Reasons â‘? stock inaction.
After the chips are waiting to buy it up naturally, so as to profit, and we spent a lot of energy, it should be is up reason. But in fact the trend of stock prices may be inconsistent with our expected, and even contrary. Then we began to doubt themselves and a continuous slump in the stock price to eventually finds his own wrong, with the attendant threw away a bargaining chip. However, fundamental changes in stock prices often become clearer in the case next time we have previously expected to rise to the track, is a testament to their original judge was not wrong.
Reasons â‘? other hot spots occur.
The broader market will rise significantly every time a hot plate appears, there will be a few leading stocks, but we do not necessarily belong to a bargaining chip in long-term hot plate, nor will it happen is the leading stocks. At this time each day watching the hot plate is simply a sharp rise is a kind of torment, the market seems to call to us all the time: "To throw away the so-called long-term bargaining chip in it, hastened to chase hot stocks, perhaps, from the hottest stock short after the attack to come back up the original shares have not yet. "So finally we have in the" Bo a short-term ", under the impulse to abandon the long-term chip chase hot stocks.
Long-term investments in three areas before the good psychological preparation
This is for several reasons may seem different, but to do so there is one way to overcome it is to early to do some psychological preparation.
First of all, even if their judgments were completely correct, but also confirmed that price would not have been rising.
This principle seems very simple, but keep in mind every time it is very difficult. Generally speaking, when we decided to hold long-term bargaining chip in the former always think: When I bought after the stock will go up. From the qualitative point of this conclusion is certainly correct, because the guarantee of future performance and growth in stock prices rise, unless the stocks fundamentals had deteriorated. Quantitative terms but not necessarily because of any stock price can not be easy, in the middle there must be repeated, there will be down process. This is not a profound truth, but we often lose sight of this long-term investment before, even though sometimes thought of but will be consciously or unconsciously, to avoid it.
Since the stock price will be repeated, then a longer period of time they hold will fall within a certain period of time. Now share prices fall, it should be expected in the fall time is there, unless there is a very good short-term operational capability to conduct some short selling operation, otherwise should not affect their long-term strategy.
If each one can think of it fell, the long-term chips is very difficult to lose.
Second, the market knowledge of individual stocks is gradually.
A company's performance from year to year despite the substantial increase in the future, but only the results of their own judgments, does not mean that the market recognition. With the company's fundamentals, the gradual change in the final market will accept, which is the root cause of price escalation. So we should be ready before the long-term holders of chips mentally prepared, and perhaps the process would be more acceptable to the market slowly, prices will continue to have repeated, perhaps we will wait for some time. Even though the stock price did not come out of their imagination in the fast-rally also be expected, and would never think to go to throw away long-term bargaining chip.
Finally, I believe their own discretion.
We often doubt their own common sense, this is not just reflected in the stock investment, in other aspects of life also will have to happen. In fact, one person's discretion is to continuously improve through practice, and if he does individual stocks and long-term fundamentals are more accurate discretion, then they should trust their own research findings, there is no deterioration in the fundamentals until the stick to their long-term strategy, not easily change their decisions.
If we are always easy to change their major policy decisions, in order to mix in the stock market is very difficult, there are too many examples to prove this point.
Conducting long-term operation of the former with the above three aspects of psychological preparation, I believe that long-term chips is the ability to take put the situation of the.
