I always remember the famous quote of Napoleon that “Two-thirds of the decision-making process is based on analysis and information and one-third is always a leap in the dark.”
This is absolutely true when it comes to the stock market investments.
In the context of growing number of debt treadmills around us debate swirls over whether the market is heading for a collapse or finding a low base for an upward move in 2012.
Individual investors crosses their already burnt fingers over the thought that have we seen this type worst volatility pattern before?
No one has got the clear clue yet.
No guaranteed prospects are sighted in stock investments in 2012.
A rule of thumb has always been that it is always wise to keep emotions out of investing.
But how can you keep out your memories, your profits and losses!
You cannot do so. Never and never in absolute terms!
Markets are very much anxiety ridden.
While investing in a particular stock an individual investor becomes a visionary or a profit-motivated salesman. He always thinks that he cannot afford to be wrong.
Psychologically, it’s hard for any investors to ignore the happy talk and pull back from the market forgetting his losses.
He also advises his friends who are itching to play catch up to the market and didn’t know where to place money by being unwilling to stand on the sidelines anymore.
His gospel to his investor friends is that, don’t chase anything and definitely don’t hold high beta junk unless it’s speculative money you can afford to lose.
Thus he becomes the professor of the department of “goat economics” in stock investment.
My experience says that mostly investors carry their bad memories.
But of course there are always exceptions.
Don’t get sucked into hyperbolic noises to the absolute market ups and downs and sure shot corporate research reports by stock analysts in the net.
Don’t chase anything endlessly in stock market. If you do so you will get lost into your memory jungle!
I tend to believe that if you listen to too much background noise you can become distracted and lose focus.
Eighty two years have elapsed since Black Thursday, Oct. 24, 1929, the day the great stock market crash began. But at the bottom of the heart of every investor the memory notion lingers that what is the guarantee that another such crash may not be altogether impossible.
Can anyone dare to count on it?
One thing is sure that Wall Street laughs all the time!
Gives you back only memories!