Contribution of Emotion in Investing

Contribution of Emotion in Investing

EMOTIONS ARE YOUR WORST ENEMY IN THE STOCK MARKET

Contribution of Emotion in InvestingEmotion plays an important role in many aspects of life. Most of the decision we take depend on our emotional quotient either directly or indirectly. It is no different in investing. Though it is impossible to keep emotion out of the equation, it is imperative to keep it under control. In fact, the success rate of our buying/selling decision in stock market depends unswervingly on this factor. There are two extremes between which decision making swings like a pendulum. Most of us react to these extremes. We are either too excited to calculate the risk involved in buying a particular stock or too depressed to identify intrinsic value of a stock when it is down. It is always important to take a balanced and an informed decision. Striking the balance is an art. It needs to be practiced over time. There are scores of channels, magazines and hundreds of analysts who often occupy our mind and ride us through different sectors and stocks. It is this ride which takes us to the extremes.

Seldom do we think about who gives them ideas?

How much do they make out of their own recommendations?

What are their intentions?

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