Emotions can greatly impact individual’s decision making process. Its effects can be seen throughout stock markets. If you know about these biggest emotional mistakes of shareholders in stock markets, you can boost your performance.
According to a 2015 study conducted by researchers at University of California, emotional excitement not only creates stock market bubble but research shows that frenzy actually causes them to grow.
Emotions are equally important in driving the share prices. They can move stock price either to astronomical heights or to unbelievable downside levels. It can even force you to cut right & profitable positions in share markets.
Sometimes, they can influence you to stand on sidelines during unique & cost effective opportunity. Emotions can have different effects on different individuals at different times.
They can also affect risk taking capacity of an individual in securities. Here are 15 biggest emotional factors affecting shareholder’s decision in share markets:
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It is one of the most costly & biggest emotional mistakes of shareholders in stock markets. Every person wants to grow his/her money with certain risk.
Share trading is a good means to increase your money. But, greediness to increase your wealth as much as possible in short time can adversely affect your decisions.
Once you start building unrealistic targets for profits, your chances to lose money increases. Sometimes, investor’s greed can lead to securities being grossly overpriced. It may even result in creating a bubble that can burst anytime. This get-rich-quick mentality makes it hard for equities to maintain their gains.
Furthermore, it can also derail you from strict investment plans over long-term. It is necessary to follow basic fundamentals of investing in share markets.
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