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There are traits an investor must not possess because it destroys their investment goal and long term plan of becoming rich. These are the five traits an investor must not possess.
As an investor, emotion must not control investment decision because it destroy investment goal. It is also essential for investor to manage the behavioural impulses of buying and selling that comes from market's volatility. An investor must manage their emotion in a volatile period and keeping a portfolio diversified for the best overall returns through all types of market environments. Investors who enter into investments with a base level understanding of the risks involved can control their emotions to help them achieve their investing goals.
Greed can destroy long term view of investing. Any Investor that sit at a corner waiting for the market to show signs of movement before they position themselves can do themselves harm. As they plan to go in, the market has experienced speedy growth. These investor miss that great opportunity for market growth. Because of their greed, they tend to buy high and sell low. Investing greedily makes an investor terrible and affect their decision making in investing. Because of greed, investor keep buying more of an investment and they have no idea what is driving the price of that particular stock higher until it suddenly crashes.
It is not natural for an investor to risk their money through investing but thought of losing all their money in a flash is fearful. Investing has a level of risk and an investor need to be aware of it. The fear of failing as an investor, losing all their money and the fear of being lost about what they have invested into can be really fearful. Most investors sell when they are fearful and wait until conditions improve before they re-enter the market. An investor should know what they own and be less likely to be influenced by the actions of others and they will surely take profit from the stock market.
When an investor lacks patience, they exit the market early and in losses. Impatient investor violate their discipline and maybe headed down the path to financial ruin. The impatient investor will seek more immediate investment returns so they might sell because of panic, moving from one stock to the other, experiencing losses. The investor lack self-control and it ruins their chances of creating wealth. Being impatient can affect decision making, timing in the market and lack of diversification. It is time invested in the market, and not market timing, which is the greatest contributor to long term performance. As an investor, don't sweat over market or price volatility but focus on naira average strategy, good company fundamentals and access your stock performance monthly to quarterly.
Overconfidence makes an investor buy when they feel confident, sell when they get scared, miss the market recovery and jump back in when the markets feel safe again. Overconfidence can destroy an investor if the investor is not sure about the level of money risk. Emotions can drive overconfidence, prompting investors to take unnecessary risks and lose a good amount of money in the market. Overconfidence makes an investor believe they can get in and out of the market at the exact time. When an investor sees good returns on an investment, greed sets in leading them to take on more risk. When the market goes down, they rush out losing confidence in that investment.
Image Credit: Google
These traits can hinder an investor's plan to create wealth and achieve success in the market in the medium to long term
Image Credit: Google
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