Wednesday, August 26, 2015

Investing and emotions

They dont go together too well. In investing we have to be more analytical and mathematical. But when we look at the stock market we see people doing just the opposite. If something happens, for example what happened with stocks all over the world on monday because of chinese stock market crash. People started to sell and sell fast. Probably the same people are trying to buy their stocks back now at a more expensive price.
If you read investment related blogs, books etc. then nobody wants to give you any advice and thats because stock market is too unpredictable, theres just too many variables for a human brain to process and get accurate results. But Ill give some advice, dont think so much and be calm whatever happens.
Some things you can do to not get too emotional is to write down some realistic goals for yourself, this way you can track your progress and avoid stupid decisions that come from high emotional states.
Emotions should be left for your family, friends, close ones and simple math in investing.

What I do is that I just keep investing, when the price is low I buy more and when the price is high I buy less. And if the price is too high at given moment then I just choose another stock or another investing option. If you keep buying stocks for lets say 5 years then your average buy price will be below the 5 year average when you buy them in the way I do.

Keep calm and keep investing :)

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