Allow Your Emotions to Drive Your Trades:
Remember the internet dot-com bubble in the 1990s? Many of these companies lacked fundamentals. Investors, afraid of missing out, joined the buying frenzy. And lost. Malo.
What to do: Take emotions out of the equation when buying or selling stocks. Don’t fall in love with a stock. Don’t follow the crowd who may be getting into overvalued assets. Instead, create a well-thought sensible investment plan and follow it.
Lack of Patience:
Patience is key to gains in the stock market. Buy good stocks and give them time to grow. Most people lose money in the stock market because they do not have patience. True, many of these people find a quality stocks but they don’t have patience to wait for their finds to grow. They want quick results. Warren Buffett describes the stock market as a device for transferring money from the impatient to the patient.
What to do: Practice the same patience you have with your spouse. Oh, oh. Buy companies for life and hold them forever. This is vintage Buffett.
Trying To Make a Quick Buck:
This is a typical mistake among traders. People are always in a hurry to make money. They want to become rich quickly, want to be like Warren Buffett. But Mr. Buffet accumulated his fortune over five decades. And here you are, a beginner or average investor, trying to make a quick buck. Remember: Success in the stock market needs time and patience. Don’t be swayed by one news channel about a stock with great growth potential. Don’t load up on that one stock based on that one news item and hope for a great quick return. Novice investors who take this scheme, lose and leave the market – lost opportunity during these golden years on the stock market, my friends. How sad.
What to do: View the stock market as a place for investment – a place where you park your funds which you expect to grow in a reasonable period of time, not tomorrow, not next week.
* * *
Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.
* * *
He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies. He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at firstname.lastname@example.org.