Most investors jump into the markets without taking the time to do any legwork. They assume by reading a few books, listening to the talking heads on CNBC and following a few so-called experts, they are ready to take on the stock market. The market is a mighty beast that has a win ratio of more than 90%. Only 10% of investors can consistently claim to make walk away with gains.
Stock Market Learning Lesson 2: Get a grip on your emotions The ordinary individual regardless of their background is almost always on the receiving end of the stick when it comes to investing. The reason for this predicament is predicated upon the fact that the typical person leaps before he thinks. In other words, the decision-making process is driven by their emotional state. Emotions and investing are like oil and water, no matter how hard you try they will never mix. Emotional traders are bankrupt traders. Throw emotions out of the window; kill them on sight.
The solution The solution to this dilemma is dangerously simple. In fact, it is so simple that its simplicity is what makes it so hard for the multitude to implement. As we stated emotions should be shot on sight; the acronym shoot and ask questions later is highly applicable in this instance. Emotions should never be allowed to have a seat at the discussion table. To be a successful investor one needs to do the opposite of their useless emotions are dictating. There is simply no place for any extreme deviation from the norm when it comes to investing, and euphoria and panic are extreme deviations from the norm