Business Administration

Archive for the ‘Emotional Investor’ Category

The market does not usually move as experts predict, in spite of all those who actively invest in it. There are plenty of theories that seek to anticipate their movements, cyclical theories (duration of a bull market according to historical averages), theories of calendar (to be fluid in the period from May to October and bought in November to May), conspiracy theories (the “big boys” are driving up the market for amateur investors to buy and then throw it down), theories of the “butterfly effect” ( economic policy taken by the authorities of the stock of a country of Asia passed on to consumers ends of a Latin American country: everything is related), theories weather (hot countries are less productive and hence their bags have lower yields than those of cold countries), among many others.

And in the midst of this nonsense novelistic, balancing against sudden movements that seem to have no explanation, surrounded by analysts whose researchs are often the closest to the speech of a patient with schizophrenia (at quickly switch between totally opposite positions), trying not to give in to pressure from the account executives who want to sell financial products and useless hyper complex, the lone stock investors looking to stay calm when deciding when to buy and sell, risking financial health and often their health to dry. How can we, as retail investors fight these situations described and not perish in the attempt? The answer is much simpler than many believe: controlling emotions. The psychology of investor is perhaps one of the most important and most unexplored of finance and the economy in general. Let’s look at 3 tips to consider if we succeed in a market full of hungry sharks like the present:
1) Keep hot cold decisions. This is, in my opinion, the most common mistake that inexperienced investors comment. After conducting a thorough study, which in many cases can take many hours or even days, defining areas of buying, selling, stops, etc …, completely change its position when the bell rings and the money starts to turn. An example: after thoroughly analyzing the chart and the most important fundamentals of the company decided to buy 20,000 XYZ at $ 30.30 usd. But the market opens down, XYZ plays the established price, and I do not buy because I was scared. The next day I look from the outside as XYZ “bounces” as is my analysis and is very likely that frustration leads me to hurry in the next trade and make me into a chain of errors.

2) The intuition guardémosla for astrologers. It is true that some people are born “with skin” with the markets. George Soros, Warren Buffet, Paul Rotter, are in the group of those privileged few. Do you. one of them? It’s easy to find: make trades based on your intuition for a month (with little money, please) and post the result. If it was positive, pay attention to whether the market is not in a rally in which everyone wins. I have known (and still do) a few investors that operated following the intuition and called me every day to tell me that much money earned on market rally. When the market corrected one, it was me who called them but never met: the market had been cleaned and had returned to their previous work. Let’s look more graphs and numbers and give less credit balances to the hearts, we Unless we are in the market for more than 20 years.
3) If I buy short-term, short-term leave: to respect the spirit of the trade. XZZ shares bought on Monday this week because I thought it was going up, with the clear objective to sell on Friday. The action went down and that Friday I decided to keep it. 6 months ago that I have, I am a 30% down and I’d walk to light a candle to San Cayetano (or the Holy of the Exchange, if any) if the market would give me a chance to break even. Do you recognize this story? It is the story of an investor who started a short-term operation went wrong and became a shareholder in the company. The market tends to turn the leaves floating aimlessly in the air very easily determined.

For these reasons, dear investors, and at times like we are living totally revolutionized the market with almost unprecedented volatility, we are smart: look isolate feelings when negotiating a role, keeping the decision aside and respecting intuition philosophy of the trades made, increasing our chances to multiply our savings stock. We will meet next Friday with more news and market analysis.

The bag is a very difficult place to make money. It is not a new thought. In the last 100 years the stock market has been punctuated by periods, that bull markets rise, followed by rapid decline in bear markets. This cycle has happened in the past and will happen in the future, because after all, markets are driven by people. Market cycles are repeated, as history repeats itself.

People are people, and where the money is at stake react emotionally, which usually translates into making wrong decisions. Investors have a sad history of making money in the market. Numerous studies have shown that investors buy and sell at the wrong time, and they usually buy and sell investments at the wrong time wrong.

Behavioral researchers have discovered that the wrong decisions that investors tend to make are the result of overconfidence in their investment knowledge, overtrading, lack of diversification, and the erroneous forecast of future events based on recent history. The success of the stock market that investors need to act independently of the crowd, while using a non-emotional, the test of time, the focus of investment is almost mechanical. If fear and greed are not removed from the investment equation, then the results can be catastrophic.

Unfortunately, investors are still making the same mistakes over and over again. That’s how. Robert Safian in Money magazine, said: “Across America, millions of people are afraid to open their account statements, afraid to look at your 401 (k), fear of knowing what they have lost during the long bear market and where they stand today. “It’s a very sad state. But did not have to be that way, the investor orders if only they had had an investment plan that forced them to take profits, and had high losses to its reserves, to protect prices collapsed. Read the rest of this entry »

It was news especially in the field blog and I do not know the impact it has had on traditional media. The company Zarahas been forced to remove bags like those in the photograph because it included an icon that some associate with a tragic memory such as the swastika, albeit a very ancient symbol and Indo-European at all the theories related to Nazis who usurped their meaning.

In the first place werealize the enormous power that lies in the hands of consumers, An action can only be decisive if the means are fairly contentious issues or issues that touch is connected with so-called “politically correct.” And here is where we ended at the second part, how brands should consider not only the tastes of the client in order to meet basic needs but also increasingly emerged as the opportunity to connect with the emotions of the consumer.

This is the new challenge for brands, products, companies and projects. Here is the Corporate Social Responsibility or because the entities assume energy savings if only not to be perceived as “dirty.” In turn, the simple act of buying may be turning into an experience where consumerism is overflowing with inherent human like feelings and senses. Not a bad challenge to the traditional trade more qualified for the task with the cooperation of the owners of the best brands.

Investing: Investors are too emotional and have an excess of confidence. Learn everything you need to know about investment and investors are too emotional and have an excess of confidence.

The bag is a very difficult place to make money. This is not a new thought. In the past 100 years the stock market has been punctuated by periods, bringing bull markets, followed by rapid decline in bear markets. This cycle has happened in the past and will happen in the future, because after all, markets are driven by people. Market cycles are repeated, as history repeats itself.

People are people, and where the money is at stake react emotionally, which usually results in making wrong decisions. Investors have a dismal record of making money on the market. Numerous studies have shown that investors buy or sell at the wrong time, and usually bought and sold the wrong investment at the wrong time.

Behavioral researchers have discovered that the wrong decisions that investors tend to make are the result of overconfidence in their investment knowledge, overtrading, lack of diversification, and the erroneous forecast of future events based on recent history. The success of the stock market requires investors to act independently of the crowd, while using a non-emotional, the test of time, the focus of investment is almost mechanical. If fear and greed are not removed from the investment equation, then the results can be catastrophic. Read the rest of this entry »

Tip # 6: Leaving emotions aside completely

With this in some way back to the first tip, but it is important to note that one does not invest because something looks interesting, because we like the entrepreneur or because we totally need to get some income from somewhere.

Not bad that one wants very much a project and decide to invest in it, provided the project and rational analysis of the warrant. To explain better, it is not the same as investing in a project because I liked (but never seen or analyzed at all the numbers) to invest in a project that will analyze it and defend it to death.

Nor is it good investment because “we need to invest, this is the most common error seen in people who are just beginning. Investing for the simple fact that they want to invest and, here, now, something. Even no need to invest in, but we need $ 100 and a business seems to be the solution to this need, remember that always, above is the analysis of emotions.

So as I said earlier it’s not a matter of suppressing emotions, but if you leave them in the background. I often succeeded affinity with an entrepreneur, is more in the last project we put together with other partners was just the level of trust with the entrepreneur who took us to invest in the project. Read the rest of this entry »

Tip # 4: Basic questions we need to know

Many times in the Commonwealth of Empresores.com come entrepreneurs or people with investment projects and provided they are asked something, beyond the explanation of the project, the following basic questions.

These questions are essential both for the entrepreneur who has a project (More than just the process of capturing potential investors) and investors (helps us to see if the proposal we are interested).

The questions should always take into account are:

1 .- How much money is needed?
2 .- How or what they will use that money?
3 .- What does the entrepreneur? A partner, an investment partner, the contribution of several investors, etc..?
4 .- What Return on Investment (ROI, RSI, etc) is the project? (Where possible monthly or annual) is always good to bring also the Internal Rate of Return (IRR) and the data of Net Present Value (NPV)
5 .- What guarantees or insurance gives the investor?
6 .- What is investment risk?
7 .- How can the investor enters and leaves the business?

With these simple questions that every well-designed project, and should contain, is accelerating the process for both parties. The entrepreneur knows that is communicating important information for the investor and the investor now has only 7 responses, a measure of the degree of interest.

Tip # 5: The union is strength often. Read the rest of this entry »

Today I will talk a bit about what I consider the “emotional investment” I believe this concept more than anything for those who are just starting in the business and investment. Throughout this post you will find a few tips I learned over time and in this activity, one is learning on the fly.

What is an emotional investor?

Consider “Emotional Investor” to anyone who is just starting in this investment (Although even happens to people advanced). An Emotional Investor usually is desperate or rather eager to invest, but beware, the emotions and investment, although they may be united, there are two things that go together.

Investments have to use our rational, otherwise use our money, as I said many times, with the technique of the casino. This means, we are betting and random fighting our money.

No doubt the money and emotions have a significant affinity. Just let us burn our savings and see how we feel after a loss means putting our emotions into play. But the same is true when win, our previous emotions we can play against.

Tip # 1: Do not get carried away with nice messages.

Day by day and especially now that the Internet provides us with information everywhere, we find many suggestions where to put our money. We can find messages and proposals that we make us rich overnight, working with no time, from home or even make money without working. Read the rest of this entry »