Investing in stock market....in my own opinion:
Investing is all about searching an undervalued growth company with good balance sheet, holding onto it, until the business matures or until we have found another company in a better bargain & higher growth rate.
Investing is not about wanting to make quick profit, more profit, much profit from stock trading (in my own thoughts).
When we bought into company, after a short period of time, says one week - the price of the share has already rose to 20% from our purchase price. The question i always ask my self is: SO WHAT IS NEXT? Am i going to sell all my shares? Sell partial of my shares? Am i supposed to be happy? Satisfied? Proud? Or selling all my shares and looking/moving to other company to start like what i did on this counter before? Or keep my cash to wait for opportunities to come?
All these are tough questions when we face them in real life. As a human being, we are filled with emotion: happy, sad, greedy, satisfied, competitive, proud, self-esteem, scared, regretted, giving up, etc etc... It is not unusual our emotion has taken over our mind in our daily life. This applies to investing in stock too. I would say most of the time, it did. At least.....to me!
(1) I will sell all of my shares and hold the cash, how can i assure myself not to buy back this shares again? Or will i buy into another company in a similar way of investing? How can i guarantee that this company is better than the previous one? If the previous one's share price has been moving up while my new company's is not, how can i control my emotion?
(2) I will sell partial of my shares with the price of 20% above my profit, will keep the balance of the shares. Will i use this cash to buy another counter in similar way or keep the cash? If the share price has been moving up after my partial selling, will i be greedy to add in some shares? Or will i feel just satisfied and keep holding the balance shares? Will i have the urged to sell the balance shares since the price has been corrected many times even though it is in the up path?
(3) When the price of my shares has been moving up by 20% from my purchase price, will i be happy for that? So what should i do next? Will i have the urged to add more shares? Or to sell partial/all of the shares?
(4) I will be satisfied and proud to myself, so what is next? If i always feel satisfied and proud to myself, it might be the beginning of a disaster of my financial failure in investing in stock market. When i feel too confident on myself, i might think i am good enough, i know enough, i do not need to study more or continue to study. This will be a real DISASTER.
(5) As long as the fundamental of the company remains intact since my first research and the price is not overvalued, i will keep holding the shares. This is the key in investing - continue learning and focusing on the company's fundamental analysis, stay away from the market's noise!
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