when you are investing in the stock market??

Question

why are you told to remove emotion from your investments, surely this is why life is becoming more stressful

people have emotions in everyday life and if you remove emotion then you are in danger of over reacting, for instance a stock jumping when the company announces it is to sack 5000 people

(you dont know who it is sacking, they could be sacking the best 5000 or just picking names out of a hat??), surely this is not 'ethical' investing

i was told to ask this question in philosophy as well??

Answer 1

You are right in theory, but in reality a company laying people off usually has a stock value increase.

The reason for investing in stocks is to make money and emotions usually cause you to lose money. When stocks go down, sometimes people sell out of fear and lose money before the stock goes back up.

If you really want to invest based upon emotions there are mutual funds that invest in companies that protect the environment.

Take care,
Troy

Answer 2

Overreacting is what happens when you DON'T separate your emotions. When you keep them in check, it's much easier to look at things in a rational manner.

Emotions are at the heart of wishful thinking and wishful thinking is what leads to bad decisions. For instance, hoping a stock will go up rather than looking at its fundamentals and seeing that that's unlikely. Or picking a stock because the company makes you feel good, even though the company's business plan may be crap. Or being lured by past high returns into investing in a very risky stock. Etc. etc.

Also, removing your emotions will make life less stressful, because then you're not sweating the small stuff. (And as the saying goes, it's all small stuff.) Given enough time, anyone can make a killing on the stock market. You just need to do your research, have patience, and don't panic...in other words, don't let your emotions get the best of you.

Answer 3

Investment in stock market is more or less gambling.Just like a card player holding the cards and evaluating his moves a stock market player also evaluate the stocks and plays.There is no question of emotions but there should be no cheating.
Your own dealing should be straight and take the winnings or accept loss with dignity.

Answer 4

Because emotions will tend to have you panic and pull your money out at the wrong time. You'll be moving with the herd, not getting the big gains by being ahead of them.

Information is they key. When events happen, it's important to analyze why, and what the consequences are for the company, both good and bad, down the road.

Answer 5

When the markets get down & slowly started to increase thts the time u invest.

My knowledge!