Stock Investment Psychology: Rational Investors Can Last Long

The reason why people fall into the trap of sunk cost and continue to invest and work in the direction of their original efforts (proved to be incorrect) is that whether they can succeed in the new direction is risky and has no bottom.

Take queuing as an example. Someone has been on the A team for a long time, and it may take a long time.

Now there are B teams coming out and going to B team to succeed.

So sink

Traps are not only universal, but also robust and very stubborn.

Investing in stocks is full of unforeseen events. Even the smartest, most experienced managers and investors can not avoid making mistakes.

No one can be foolproof.

Therefore, investors need to work hard to ignore any sunk costs, whether psychological or economic, and stop losses in time.

Otherwise, it will disturb the judgement of the market and the choice of the new investment target.

You can find people who are unrelated to the original decision and therefore can not be responsible for them, and listen to their opinions.

Why do we admit that the original mistake can make us uneasy? Admit that mistakes can hurt our self-esteem. We can blindly fill in positions and lose more money. Our self-esteem is not hurt more. Even if the original decision is good, it may not be good now. The original decision may not be wrong, but we must give up when things are changing.

Stock investment is a major decision for individuals, and major decisions often involve a series of decisions.

Therefore, investors are more susceptible to sunk cost traps when investing in stocks.

Some people often like to stare at the quilt stock, and make every effort to lower the cost.

From the perspective of rational operation, this is not the best choice.

If a stock is already covered, whether it is necessary to make up or cut off the meat, or to lie down or not, depends on whether it can go up.

To make up a warehouse, we must follow strict rules of operation: if the stock fall is wrongly killed or undervalued, or if there is a special situation, the market crash will not be sold in time.

If we can't rise or fall, why do we need to make up the stock? Why not stop out? Even in the bull market, we need to find other stocks that are more likely to go up than the stocks in stock market, rather than just stare at the quilt stocks.

Of course, people may be very familiar with this stock, but is it too careless to be familiar with this stock and dare to enter the stock market?

Why do people often blindly supplement their positions after they are locked up? First, they want to lower the cost.

However, the stock investment is for profit rather than low cost, no profit. What is the significance of low cost? Second, prove the correctness of the purchase decision.

Assuming that investor a, 200 thousand, bought 10 thousand shares of A at half price in the stock price of 10 yuan, the stock price fell to 7 yuan per share due to market conditions and other reasons.

Now there are 100 thousand principal funds to buy other stocks.

The first idea of investor a is often the same.

Whether it will rise and then make up 5000 shares, the cost of shareholding fell from 10 to 9 yuan per share, so long as the stock can rise to more than 9 yuan, it will be undone.

It seems to prove that it was right to buy A at that time.

In these estimates, if the stock is not filled, the cost of the stock is very high, and it will be more than 10 yuan to unlock it. It is necessary to prove that this choice is correct and takes longer.

In fact, this is self deception.

If there are other stocks, B rises better, and 5000 shares can be bought. The 35 thousand principal can buy B to make as many profits as possible.

Stock analysts often ask such advice when they are asked how to solve the problem: "the stocks that hold stocks fall down to make up the low cost", which is the use.

It is easy to be influenced by sunk cost trap.

The key is to lower the cost. If the stock price trend is downward, the result of lower cost is greater loss.

The best way to add blindly to a warehouse is to invest blindly.

Some investors have only decided to invest 300 thousand of the stock market, but once they lose money, they will be unable to wait for additional investment when the market situation is unclear.

Their psychology was firmly locked down by sunk costs.

In stock investment practice, there is an investment strategy called batch buying.

When looking for a stock, buy 1/10 of the stock first, the stock drops 10%, and the stock is 10% until the bottom is over. At this time, the cost of holding shares is very low, waiting for a rebound.

But this is a very big misunderstanding.

For example, investors have 100 thousand principal value. After looking for a stock, they first bought 1000 shares at a price of 10 yuan, fell to 9 yuan to make up 1000 shares, and fell to 8 yuan (not 10%), but in order to calculate convenience, using integer numbers, the same below) to make up 1000 stocks, and by analogy, when they fell to 1 yuan, the stock was then cleared.

It can be carefully calculated. The stock will rise from 1 yuan to 5.5 yuan, and the difficulty is too great. Ignoring the limit of limit up by 10% per time, it needs to increase 4.5 times, and in the stock market, the stock is more than 4 times more difficult.

In addition, if the initial purchase of 1000 shares at a price of 10 yuan, the cost of 10 thousand yuan, assuming that the 1000 shares did not stop in time, when the stock price fell to 1 yuan, if there is no margin, at best, it also lost 9000 yuan.

If we buy in batches in the down process, the cost is 55 thousand, but the market value is only 10 thousand yuan. Is it not a loss of 45 thousand? So we can see that under the influence of sunk cost trap, blindly placing in bulk will cause greater losses and irreparable losses.

It is conditional that buying stocks in batches is conditional: the stock has been in the bottom for a long time and has started signs.