Danielle Park, author of Juggling Dynamite, explores why it’s so easy to let emotions dominate your investing decisions, and shares a couple of easy tips to reduce the temptation in this exclusive interview with MoneyShow.com. Watch the Video clip here.
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So true, I recently read a book Mean Markets and Lizard Brains: How to Profit from the New Science of Irrationality by Terry Burnham and he goes into great detail explaining how people generally make investment decisions on emotion and invariably get it wrong too often. Instead of looking at the facts and concerning ourselves with capital preservation with reasonable growth people look for the big quick homerun. Usually they end up striking out.
I continue to learn a lot from you, Cory, Terry and a few others who show the facts not the euphoria. I am grateful from learning the concept of capital preservation and holding some cash. Last week on the big uptick day the TV analysts, and institutional investmment people were saying we have averted Greece and we have this great deal in place the market has turned and it is up up up up now, the financial crisis is officially over. The emotion was alive and well.
I took time to read the facts and charts you and Cory provided sat back digested the facts and saw the bounce was hype, that nothing had really changed so I decided to continue with the preservation and hold onto the cash and not rush in and buy anything at what the investment house people were saying was a bottom.
I continue to learn and listen to differing views on the markets but when it comes time to make investment changes I will mute the BNN news on TV, get out the charts, and look at the finances of a company and how their stock is performing recently, is it in a trading range, and how it does historically at that time of the year as well as what happened to it in 2008. I may not always get it right but I do know I get it right more often by researching the facts and not the emotions, and in this downward trend I am preserving my capital thanks to you.