Fear and greed are the two emotions that impact an investor’s investment decisions. Mostly these emotions are often seen while trading, but in today’s markets investors are also becoming victims or losers due to the high volatile markets.
Fear is the emotion caused by the volatility of the markets. When markets are more volatile, fear makes the investors to disrupt their investment decisions. Greed is the opposite to fear. Greed is caused due to the rising markets. Investors become greedy and speculate or trade without investing for long-term. If you are one of the persons experiencing these emotions, the following are the tips that help you balance fear and greed while investing.
- Don’t buy or sell based on market predictions.
- Choose investments which you believe in for long-term.
- Stick to the stock market investments by choosing only up-trending stocks.
- Always diversify your investments in different asset classes and also different industries.
- Don’t buy stocks in greed because they have gone up.
- Don’t invest without having proper knowledge of the asset.
- Stick to companies that have long track records.
- Invest in something that you are comfortable with.
- Don’t worry about the day to day market price fluctuations.
- Look out for the long term, don’t make short term investments.
- Don’t make irrational decisions on market movements.
- Don’t make decisions based on emotions especially fear and greed.
Fear and greed always impact investors by driving the markets and make investors react to market volatility. Follow these tips to balance your emotions for making a successful investment.