The Key To High Returns Is following a systematic investment Strategy with discipline.
You are the final decision-maker for your portfolio, so you hold the burden of responsibility for any investments gains or losses. Human emotions like Fear and greed together with herd instinct are considered to be the three most dominant motivations for investors. Unfortunately, investors tend to act irrationally when facing these destructive emotions. But if you can be aware of these emotions, it can help you avoid being influenced by them.
So how can you recognize these emotions? Greed, fear and herd instinct usually manifest them self in the following ways :
Panic selling - A wide scale , irrational selling triggered by fear of losses. This selling is usually driven by news or rumors and not by fundamental evidence.
Herding to a bubble- Irrational buying at high volume of an asset well above its real (intrinsic) value which ultimately leads to a price crash and lose of money.
Holding onto investment for too long- Sticking to hot performing investment hoping it will repeat its excellent performance or sticking to a losing investment hoping it will recover soon.
Falling for scams offering ultra high returns that the perpetrators claim are guaranteed- If it is too good to be true, Don't believe them.
Sitting on the sideline- Holding to cash,money market or other very low return investments for too long, reluctant to invest in more volatile assets .
So what do you need to do ? simply understand that : The Key To High Returns Is Following a Systematic Investment Strategy with Discipline.
A systematic investment strategy provides the frame and focus investor needs to ensures emotions are held in check when making investment decisions. It is crucial to successful investing and maintaining your long-term strategy.