Essay on Don 't Your Own Enemy

742 Words Jun 9th, 2016 3 Pages
DON’T BE YOUR OWN ENEMY
Even though investors think they act rationally - on the basis of information or research into a company or industry - when the going gets tough, most people panic.
It 's a bad idea when you let yourself be ruled by emotion: whether that 's fear, greed, or other emotions. Greed kicks in when the market is doing well, and you don 't know how to take profits and run. Fear can overtake you when you see a huge sell-off is occurring.
One way to avoid working against your own financial interests is to work with a trusted financial professional – like a Certified Financial Planner, investment manager or qualified stockbroker. Any of these individuals can help you to avoid acting impulsively when the stock market is zigzagging.
MAKE SELLING STRATEGIES
You should know ahead of time the factors that would cause you to sell: for example, is it if a company has a 20% loss -- or maybe a 20% gain?
Have a pre-set game plan for limiting losses, as well as locking in gains.
The idea is to know in advance what you will do when your investments move -- either to the upside or downside. And then you have to stick to your sell strategy. It 's called having a "sell discipline." Those with a sell strategy in place fare much better than other investors.
DON’T MIND LOSSES, THEY ARE PART OF BUSINESS
A stop loss order is an electronic trading order that kicks in automatically when a stock falls by a certain pre-determined amount.
So let 's say you buy a stock at $30 a share;…

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