Are you scared of adding money into the market fearing that you will lose it? Are you thinking of buying XYZ because its a hot stock ?
As Peter Lynch says - The key to making money in stocks, is not be scared of them. This point cannot be emphasized enough. He is right,its important to understand this while investing into the market.
Think of yourself to be a part owner of a business and monitor the progress of the business periodically.Stock market is a strange place, as the price goes up more buyers will show-up to buy your share but if the business is doing good you would not like to sell your ownership.
I would not say its easy to figure out the value of a company before the market discovers it but then we all work is some industry which we know a lot about. Try to start buying undervalued stocks in the industry you know and understand much better that any analyst who is trying to make predictions sitting in his office. As you get more confident about your decisions you will feel better.
Just like all other fears,'fear of stocks' too needs to be overcome by doing(not just dreaming or thinking)
2 comments:
It goes back to what Buffett said,
"Be fearful when others are greedy and be greedy when others are fearful." It is so tough for people to follow this simple principle.
yes thats human nature i also find it difficult to take a big swing when prices are dropping mainly because one feels they may drop further.The idea is basically to buy at a rational avg price regardless of markets appraisal (If you know your analysis is right you just need to wait for people until people agree)
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