Investing and the Fear of Regret and Greed

People tend to feel sorrow and grief after having made an error in judgment.

Investors decision to buy or sell a security are typically emotionally affected by whether the security is purchased or sold for more or less than the current price.

One theory is that investors avoid selling stocks that go down to the fear, to avoid pain and regret having made a bad investment. On the other hand, they also avoid selling when prices go up, because they are very greedy and are afraid that the price will continue to rise.

Many people wonder why they are not 100% or 200% profits have taken when they had the chance. Ie their Most investors will rationalize they ran these high profits down because they were afraid they would lose even higher profits. In my opinion, for many of these investors, it was just greed that prevented them from selling their stocks.

Any experienced trader knows that fear and greed are two emotions that can dramatically affect your success in the market.

You have to deal with controlling greed and fear every day. While there are no easy answers when it comes to the stock market, one thing I am sure:

If you're a greedy trader and always try to squeeze out every last point of each trade, it is only a matter of time before you end up with a lot less than you actually started!.

Oliver Velez of http://www.Pristine.com says greed "that small sample in each individual. "Part of our success in the market, he says, is learning when this little monster a little more room to work and when to curtail its actions give." Each event has two ultimate outcomes - either a win or loss ", Velez says. "Greed can gaze at the stars, without any consideration of the rocks below. It can prevent you from considering that there is a downside and establishing a stop loss, or develop a systematic way of exit or termination of a trade if in fact things do not work. "

The embarrassment of having to report the loss to others can also contribute to the tendency not to sell losing investments or obtain.

Some researchers speculate that investors follow the crowd and conventional wisdom to the possibility of feeling regret in the event that their decisions prove to prevent incorrect.

Many investors find it easier to buy a popular stock and rationalize it down because all the property and thought so highly of.

Copyright © 2005 I.E.C. Haramis haramis@greekshares.com

Ioannis - Evangelos (Akis) C. Haramis was born in Greece in 1951 and studied in Greece, the U.S. and Belgium. He has been active in the equity markets since 1972. Since 2002 he is New Business Development Managing Director at an Investment Bank and the publisher of

Seven Investment Terms Everyone Should Know

For those who have never given a second thought, their financial future, the term "Financial Planning" a scary. Investments can be a smart way to invest for your future money, but it can be confusing for people who have no experience in the financial business. Before you consult a financial planner is a good idea to familiarize yourself with some of the terms that you become likely to hear from him or her.

* Mutual Fund-An investment made with money that is collected by people with an investment objective in mind. The fund is handled primarily buys a person known as the fund manager. Mutual funds are easy and cost-effective, because you are responsible for making the decision about where to invest the money.

* Asset Allocation Fund-A mutual fund that contains different types of investments, such as stocks, bonds, real estate and foreign equities. These are typical of the small investors who want to invest in a variety of resources to maintain. Constant returns

* Risk-Return Trade-Off-This is the amount of money you can stand to lose relative to the amount of money you are willing to invest. Low risk investments often have low payouts, while the high-risk investments usually have higher payouts. When investing money you have the amount of money you can lose before determining how much money you are going to invest and where you decide to invest.

* Compounding-Money made an investment which are then reinvested in the same or another investment to generate. Their own income

* Bonds-Money that is lent to a company or government at a specified interest rate. The company will usually give a kind of document that explains the loan amount and the agreed interest rate and the total amount to be repaid at some time or "maturity".

* Stocks-Pieces of a company for sale. One could buy shares of a company at a certain price in the hope that the company would gain a significant amount of money and that they are able to sell at a higher price would be. Stocks

* Money Market Funds-money invested in debt by an investment fund. The aim is to obtain important money for the debt. The advantage of the Money Market Account is that they offer very low investment of less than $ 1.00.

Timothy Gorman is a successful Webmaster and publisher of . He provides more debt relief, credit counseling, repair and free financial planning information  that you can research in your pajamas on his website.

Preparing to Invest: How to get started

Investments can be a source of great potential income. The two most common reasons that a person invests his or they do not have the money or they do not know how to start. These are to prepare and invest some things to consider before investing. Several ways

Save money to invest

* Lower debt

Everyone has debt and most will always be some debts, but if your outstanding credit card debt, then this may not be a good time to be investing. Credit card debt can consume and the best way to be and to create and atmosphere where you are able to save money, you should pay off high interest credit cards financially stable. If you have the maximum reached more than two credit cards or your cards and you're making minimum payments then you need to invest in paying off these debts before investing in other ways. Everything extra money

* Make Emergency Funds

Everyone needs an emergency fund for unexpected liabilities or accidents. Financial advisors will recommend that you rely on in case you lose your job or reach back at least three months of funds or 15% of annual income unexpected costs.

* Maximize Employment Benefits

If your employer has a 401 K plan, offers make sure you take full advantage of this plan. Strive to the maximum amount allowed per month. You may not think of this as an "investment" However, 401 K and similar plans are some of the best investments a person can make for their future.

Before you invest

* Consider your options

There are many different ways to invest your money. Do not rush into a decision based on advice from friends or family. Research and consulting many sources before deciding on the investment that is exactly for you. You need a goal. Ask yourself how quickly you want the return on investment and how much money you want and how much money conceivable to see your release.

* Financial Advisors

Financial Consultants can be when choosing your investment strategies. An excellent source of information In fact, if you are not familiar with the processes involved, they are almost essential. Before choosing a financial advisor, you should interview several to find exactly what you are getting for your money and always ask for references when interviewing a consultant. Figure

Timothy Gorman is a successful Webmaster and publisher of Debt-Relief-Solutions.com. He provides more debt relief, credit counseling, repair and free financial planning information  that you can research in your pajamas on his website.

Have Analysts Gotten Honest?

It caught my attention when I heard an analyst on a popular financial news program tell investors to sell a stock because too many analysts liked the company, citing the fact that there is no sell ratings.

It seemed very logical to me that analysts should not tell investors 3M (MMM), which is one of the most consistent positive results records in the history of the exchanges has to sell. But the suspicion of conflicts of interest between brokers and analysts I decided to check it anyway. A bit of facts

While the stock is not at the time of writing had no sell ratings, there were quite a few hold ratings. Now I feel compelled to diverge here and say that the figure seems rather illogical than me. If a file is good enough to hold it's good enough to buy, and vice versa if you would not want to buy then you should not want to either stick to it.

As it turns out, the average analyst rating for 3M was only light and insignificant better than the average for all stocks in the Dow Jones Industrial Average, which the company is a part.

But what was most interesting about ratings on Dow components was that, despite the numerous and serious legal problems, AIG (AIG) was tied with General Electric (GE) and Du Pont (DD) for the third best rating, bested only by Citigroup (C) and Microsoft (MSFT). AIG was actually more highly recommended by analysts than JP Morgan Chase (JPM) and American Express (AXP).

This did not do much for my confidence in analyst ratings.

So I dug a little deeper look at the more statistically significant S & P 500. What I found was that companies in the index with the worst income has actually done more sell ratings than companies with the best performance.

At least analysts were with the sell rating, something they rarely did in the past.

However, there was a significant preference for the neutral "Hold" rating to commit to buying recommendations for all files indicates reluctance on the part of analysts and sell.

Mark Mahorney is a freelance financial writer for hire.

Mark Mahorney

Creating a Financial Future - Putting Your Plan Into Action Part 1

This column has previously discussed "picturing the future we want", and that a plan to achieve this. We said that the plan of goals, measurements, and implementation should include. The fact that the embodiment is directed towards this column.

Putting the plan into action is what implementation is all about. Its one thing to have goals, but without concrete steps to achieve them, they remain dreams. The last column discussed measure of money for each of these goals. Now is the time to find out how we're going to put that money. Together

Of course, the first step is for the obvious. We need a source of income. This would be a salary, a donation, or even a loan (although we would normally advise against the latter option). One could consider multiple sources of income. This protects against excessive reliance on one source.

Assuming some income exists, we can begin to make plans for savings. Based on our analysis, we can determine how much should be saved on a daily, weekly, monthly or annual basis to achieve our goals. We can then consider whether it is possible to get the money fast enough to achieve growth. Our target date

If, in the end, we do not find ourselves able to save for our goals, we must remember that adequately the problem is not in our plan, but in our income levels. Sometimes it's just a matter of recognizing that goals can be without adjusting income levels. Unreachable This might involve second job, or side businesses, or rather may require stepping back from the situation completely, and increasing employability through education and training. It may also suggest that new, creative ideas to be considered. Alternatively, simply on sale of non-productive assets. Whatever may be the case, the income level is a crucial part of a financial strategy, and often overlooked by investment professionals.

Finally, when the incomes and savings decisions are established, we turn to the last part: the investment strategy. The latter strategy may include many different types of investments, and use many different types of methods, but in the end, it should always focus on the objectives.

For example, if the goal is to buy in one year, investing in stocks is not a house, the optimal strategy unless you plan to have a great deal of risk taking. On the other hand, if you are planning to buy if you have earned enough money, a house, but plan to continue regarding the specific time, flexibly stocks are more viable.

This brings us to the treatment of type assets. This is one of the most important decisions to make. There are at least a dozen different types of assets to choose from. Some of the most popular are:

Stocks Mutual Funds Real Estate Limited Partnerships

Art & Collectibles Gold / Commodities Bonds Insurance

Companies Derivatives

Of course, this list can go on, but we will focus on some of these. Let's first get rid of the obvious. Investing in a business can be a good choice for someone with a solid business plan and sufficient time and capital to make it works. However, many companies have a full-time commitment, and unless one is able to do their regular income, it can be a problem. It is possible to start part-time, a company is dependent on the type, and this may be an option for some. You could also invest in other people's business, but should be concerned with issues of fairness, compatibility, and incentive here. Finally, investing in a company with liquidity problems themselves, because they do not always sell a business for what it's worth, without first locating an ideal buyer. So, if you have planned to sell at a certain date, pending the achievement of a goal, you have problems.

Limited partnerships with them unnecessary trouble, especially because there is not a large market for both. So, even if they value, one may not be able to easily sell them. In this way they appear on investing in small businesses, and carry the same risks.

Insurance really should not be regarded as an investment, but I include it here because it is so often sold as an investment. In many ways one can help you plan for tax considerations, but as a pure investment, it is a non-starter.

Art & Collectibles may sometimes increase in value over time, and for people with specialized knowledge in a particular area, it may be a wise speculation. However, just like running a business, it takes time and energy, and has liquidity problems. Yet this one small part of a portfolio for some investors.

Commodities are greatest asset of a uniform point for all uniform value. This would include oil, orange juice, coal, silver, or pork bellies. Gold is a commodity with unique properties because of its long history of use as money and reputation as a reliable store of value. All goods have fluctuating prices in common, and those who invest in commodities generally have a thorough knowledge of the market for that particular good. Over 90% of people who lose money investing in commodities, while generally make a comfortable living. Experts Investing in commodities can be very risky for those who do not have specialized knowledge.

Reach Scott Pearson for comment or to learn about its investment adviser services, visit

Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide range of clients. His own newsletter, Investor's Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally and in the U.S.

Creating a Financial Future--Putting Your Plan Into Action Part 2

Real Estate can be a useful tool for investing are. The easiest real estate investment is not really an investment, but a cost reduction - that is owning your own home. Buy rather than rent allows housing costs put in someone else's bag in the direction of the assets rather than. However, if the interest is high, the amount you pay to borrow money would make the deal. Less attractive Today, with interest rates at an all-time low, it is difficult to imagine many cases where renting is more attractive than purchasing. Income Real Estate is also feasible for some. This would include the possession of small apartment buildings, storage facilities, or shopping malls. This is however to time commitments, just like running any other business, but the income can be very positive if you have selected your property. Carefully

Bonds represent money loaned to companies or governments at interest. This is a fairly safe way to make money as long as you secure loan to companies or governments. But a K-Mart bond, or a government of Zimbabwe union would obviously not a wise choice today. Like bond-rating agencies of severe recession or depression and falling interest rates. However, when interest rates rise, older bonds issued at a lower interest rate can actually lose value precipitiously. So, in this era of fast moving interest rates, bond prices tend to fluctuate much more widely than in the past, and their reputation as a perfect investment for widows and orphans is no longer viable. While they are useful compounds are themselves sterile, as part of a comprehensive plan. By this I mean that they do not grow. As a growing portfolio is important to you, bonds may not be useful. As with any other type of investment, one must consider the broad implications.

Stocks represent ownership interests in companies. As with investing in private companies, an owner of the actual company. However, stocks avoid some of the problems of investing in smaller companies. Liquidity is not a big problem, because they can sell when needed. Shares Moreover, one need not worry about making a part-time commitment to running the company, such as corporate management is already in place. However, one must always check the management to ensure they are working in the best interest of the shareholders. Normally one can depend on the media and assist in this monitoring process, but this method fails off. Yet, despite this problem, stocks are often the ideal investment for most people.

Mutual funds are simply baskets of stocks, bonds or other investments, together with other shareholders of the Fund. They help small investors diversify their business. (Diversification vs. Concentration - one can choose to distribute a wide range of investments or to concentrate in one or two general concentration their money is much more risky ..)

Derivatives are a broad category of vehicles that are 'derived' from other investments. This can include options, futures, swaps or. Options considered derivatives for example because they are based on the performance of a company stock. If the stock goes up or down, the option more or less worthwhile. Derivatives are sometimes useful for large account management, but generally provide a more intense result. So if a company's stock go up a small amount, may be an option to go up a lot, and vice versa. This use of leverage can riskier derivatives, and generally unsuitable for retail investors.

In much the same way, using the debt for investing, such as purchasing, margin also increases leverage, and thereby increases the intensity and risk. We recommend avoiding loans for investment, except in extreme cases, such as the risk makes this option stressful for many.

The choice of assets is only part of the battle. Most importantly, one must choose whether to invest for income, growth, or incrementalism.

Reach Scott Pearson for comment or to learn about its investment adviser services, visit

Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide range of clients. His own newsletter, Investor's Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally and in the U.S.

Seecrets on Investment: Tired of Making Huge Losses in the Stock Market - Part 1

Over 80% of all individual investors lose money in a given time span of ten years. This figure is probably higher, since most people reluctance to reveal their losses. This article provides a broad overview of the financial landscape. Reflects the personal views of the author as an individual investor and author of a stock charting software with the experiences learned from the University of HK (hit hard). Use this article as the sole form of financial advice. Financial advice are available from authorized individuals and businesses, as required by law in your own country.

Investment is a statistical game. You win and sometimes you lose most of the time. To stay ahead, all you have to do is to make sure that your profits are more than you lose. More importantly, how to reduce losses and reduce the errors will be crucial in successful investing.

Take a typical fund manager. Of the ten positions, the fund manager can only win 40% of the time. Say, the manager makes an average return of 20% for each position. The rest are mistakes, but this manager capped the losses by 10% each. Do the simple math, and lo and behold, this manager is moving forward with profits. This is a simple example - professional fund managers use complex variations of this simple theme.

Another example is the venture capitalist. Say, of the ten companies, but succeeded. The company was successful return of 2000%, perhaps more productive. The remaining nine companies failed miserably and these investments are depreciated. Using this model, the venture capitalist is still ahead.

Headlines, media, advertising hype.
Most of us are familiar with this typical headline: "Whiz kid makes stock picks that most fund managers to outperform the market better." When such stories is front page news on the mainstream media, it is likely that they appear at the end of a great bull market. Stories like these characterize the misconception that anyone can pick stocks at random and win all the time.

Perhaps, a more enticing advertisement "How I 2600% (annualized) on a winning trade" may be interested to us. Any seasoned investor will be able to get a handful of transactions spectacular performance, such as 50% in a week has to offer. annualize this and it works to 2600% a year. But such transactions are few. There is no one in the world that such a method or strategy that is consistent and sustainable.

It is wise to deal with a critical mind and skepticism the media. Rationalisation of the possible reasons why the story appears a number of useful and not so clear understanding. For example, if you have a large position in a stock, then obviously you will only sing praises about why they will take to encourage buying. Momentum more her colleagues The author recalls a private analyst statement: "I can write great merits a reverse stock I can write some scathing things too."

Market gurus, financial astrology, divination.
Joseph Granville, a market technician, started his newsletter (Granville Market Letter) in 1963 and is still going strong at the age of 80 +. He was accurate to predict the market decline in 1976, but was wrong in 1982 and 1995. Given the statistical nature of investing, he had his successful talks and his fair share of blunders too. The good feature of this man must be willing to apologize to his. For his mistakes

Why do people continue to subscribe to his newsletter? This author suspects that his loyal customers are people who have their own opinions and views can form on the market, but they are susceptible to a different perspective or point of view they have missed in their own analyzes.

It's the same with other known market gurus. It seemed the media and the public are intolerant of their success rates as being not good enough. The estimates of this market gurus should be treated as a tsunami warning. Nine times out of ten, the warning appears to be false and people accept it and track with their normal lives. Each warning is taken seriously and the cost of taking precautions are minimal. When a warning proves to be accurate, it will save lives. It should be the same with predictions of market crashes this market gurus' are. Investors have to prepare just as they would with an impending tsunami warning. Itself

After seeing a BBC program on Membrane theory, May 11-dimensional worlds and parallel universes, financial astrology, feng shui and other methods of divination have some merit. This author recommends investors to have an open mind and, more importantly, understanding the strengths and weaknesses of each method. By taking advantage of the strengths, one can indeed enjoy the benefits.

The concluding part 2 will outline fundamental analysis, technical analysis, plus some tips on successful investing.

You may freely reprint this article provided you publish it in its entirety, including the author's bio and activating the link to the URL below.

The author, Stan Seecrets, is a veteran software developer with 25 + years experience in  which specializes in protecting digital assets. He has real-time pricing systems developed and has witnessed the stock market collapse of 1987 and 2000/2001 in real-time. You can reach him via email (Stan Seecrets.biz).

© Copyright 2005, Stan Seecrets. All rights reserved.