DLC Financial Advising Services

How to be a successful stock investor?

Have you ever heard about “ the stock market is the same as gamble.“ with “Making money in the stock market is all about luck.“? However,once in a while you also learn about some people who are making huge gains in the market.You may wonder why some people make gains in the market but most lose.Is there some magic formula?

First of all,you may realise the reason why most stock investors fail. According to investment psychology,it is found that most investors’ investors’ investment behaviours are irrational.Their decisions are always affected by emotions, for example herd behavior.When they see other people make gains in the market,they will follow them,it causes bubble economy.Unfortunately,they are buying high and sell low.This violates the principles of investment-buy low sell high.low Do you remember the Financial Crisis Of 2007-2008?Have you thought about why people buy high and sell low?In the 2007s,some people saw others buy stocks and make gains so they followed them.The stocks being higher and higher and people think that it will continuously rise so they are reluctant to sell.Lamentably,the financial crisis happened in 2008.The stocks fell sharply.This shows that investing can’t be influenced by emotions,otherwise the consequences will be disastrous.

Moreover,they are not studying the business before investing in the stock.They don’t know how to manage rebalancing,for example we have 50% cash and 50% stock,if the stock is increasing and your stock is more than 50%, you may sell the remaining stock and change it to cash to make it balances.If you want to be a successful stock investor,you have to change your investment mindset.Investing is a rational game.We can’t follow people and we need to diversify the risk.For example,you can allocate your money into various financial assets such as bonds and commodities instead of solely investing in stocks.This can reduces your investment risk for more stable returns.

To conclude,you should do research to analyse market trends and identify potential risks before investing.Finding out the most suitable stock for you.Remember the basic skill of investment principles is ‘buy low sell high’.Managing your emotions is the key.If you can’t do the above,you can find a professional to inquire such as financial advisors.They can give you a financial health check and create a personalized financial plan.

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