There are only two kinds of stocks; Those that make you money and those that don’t. That’s why protraders don’t fall in love with their stocks !

WORDS OF WISDOM FOR THE DAY :


One of the big investor mistakes I've observed is that some investors, once they've taken a loss on a stock, keep looking for an opportunity to buy that same stock. Without realizing it, they become enamored of the stock simply because it has "done them wrong." Like an adolescent who's been beaten up, they are looking to "get even." "I'll show that stock," they say to themselves. By so doing they lose focus of what they are trying to do: Make money, not save face.

There are thousands of companies available for them to invest in , so why do they keep coming back to a proven loser? The answer is, of course, ego. Ego is one of the most destructive forces that you can unleash on your investment performance, and we will take a close look at how it manifests itself in the next chapter, so you can recognize it. It crops up in everyone now and then, but when it does, you must resist it and think logically.

If you are fishing and a fish slips off your hook, do you refuse to pull in any fish other than the one that got away, from then on? Of course not – you throw your line back into the water in hopes of catching "a fish," not "the fish." It seems obvious when fishing, but unfortunately, many people's common sense goes out the window when it comes to the stock market. They keep gunning for that one particular stock, ignoring the other rich targets which abound around them. Thus, one mistake begets another.

Sometimes, people also return to a stock because they had such a good experience with it. They made some good money off this stock and so they have warm, fuzzy feelings for it. Again, this is not logical thinking unless the stock has recovered and is showing itself still to be one of the stronger stocks in the market. 

Once you have sold a stock, forget it, whether it was sold for a profit or a loss.

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