Why Doubt is causing you to invest on the wrong moment. it is the combination of uncertainty and doubt that make a stable castle break.
00:00 The supermarket example
Your behavior in the supermarket is very similar to investing money on the stock money. You want to choose the fastest lane, you want to be done as soon a possible. The same goes for investing, you don’t want to spend all your time on it. You want to make money as easy and quick as possible.
01:33 Why we doubt our own judgment
Back to the supermarket example, we want to be lining with the shortest line as possible, we don’t want to waste time on a long line. We want to choose the fastest line as possible. We want to have control over the time we spend in the supermarket, and yet the only control we have, is following a certain strategy and be satisfied with it. In investing it’s the same idea. You believe you have found a good stock that will be investing your money in for the coming years. And then, you see another stock performing far better… Will you divide your total amount over both or will you keep going? The first is like betting on multiple numbers on the roulette table. The change of winning will be higher, but will you make more out of it? No. because you lowered your bet amount as well.
06:10 Uncertainty confirms doubt
Again the supermarket example, standing in line, and you are waiting for your groceries to be checked out. You are looking around you and see that the lady that was after you is already done in the other line. The uncertainty is kicking in, your thinking, “I KNEW IT, I choose the wrong line!”. Whenever we feel, we have no control over the situation. We will make weird choices and decisions in our lives. And not always for the greater good. In stocks it’s the same, although we have rational strategies. Whenever we see the stocks moving in a direction we didn’t predict them to go, we go nuts and become uncertain. Lets take a look at Tesla, before the stock split. It was worth over 2k dollars per share. They did the stock split. And now is Tesla added to the S&P500. Prices of the Tesla stock has been increasing again. This is all uncertainty for the better though. The question remains… What should you do?
08:28 Why we buy at the wrong moment
In the end, we buy at markets with the highest and sell at markets with the lowest. And if we win or lose? Emotions run so hard through our veins. We have emotions on investing and somethings that let us make the wrong decisions. So? We need to try to keep our emotions away from money and investing. We buy or sell at the wrong moments, because we are so attached to our money.
10:20 Bonus: how to overcome this
You can prevent this all. The money you invest, should not be money that is yours to use anymore. You just should see it as gone. See it as money that you use to make it grow over time. As if it’s someone else’s money. Trade it in such way that only the profit you make from it is yours to keep. Having a clear strategy in it is very important. But how do you stick to a strategy, when you don’t know the situation? Can you stick to a strategy even in rough times?
12:30 Your best buy!
In my book, I continue describing this, if you’re interested. Get my book! It’s now on sale as a E-book version.