I think most investors will agree that the Number One obstacle to total investment success is simply their emotions.
And when you think of emotions that impair logical investment decisions, nine times out of ten, you come up with the Big Duo of Fear and Greed.
But… truth be told… there are several other emotions in Investor Psychology 101 that interfere with sound investment decisions.
RMB Unit Trusts have identified what they call The Investor Psychology Cycle.
It works like this:
Picture a Bell Curve. At the left of the graph, we’re at the bottom of the last bear market. The typical emotion at that time is one of Contempt. Most investors are hating the market right now, are scared to death, and see no future in it whatsoever.
But then a new baby bull market is born.
As that baby bull grows, the left side of the bell is formed. The next step up from Contempt is Doubt and Suspicion… followed by Caution, then Confidence, then Enthusiasm.
And then we get to the top of the Bell, with Greed and Conviction. We can do no wrong. Heck, we may even become full-time investors. This is easy!
But then the right part of the Bell starts forming.
Going down, we first run into Indifference, followed by Dismissal, then Denial, then Fear, then Panic.
And then we’re all the way back to Contempt. The Bell Curve is fully formed.
Do any of these emotions sound familiar? They ALL do to me.
So you see, there are lots of emotions other than mere Fear and Greed that can derail our best investment efforts. The Big Duo just occurs at market extremes.
So how do you tame all these emotions whirling about in your mind and gut, detracting you from reaching your investment goals?
Well, I wish I had the definitive answer. But I don’t, and no one else does either.
However, I believe I have the next best thing. It’s in the form of my trend-trading system. When you stick to the plan – you’ll come out ahead in the long run. And my particular system eliminates emotions from trading better than any other one out there, in my opinion.
Want to discover how it’s done? The answers are all on my website, www.etftrendtrading.com
Please call or email my office with any questions.
The “Helping You Get Rid of Your Emotions and Become a Successful Investor” Trainer,
Big A