2007-09-20 00:01:20 · 4 answers · asked by yak 1 in Business & Finance ➔ Investing
Boy, where do I start?
1) You may pick a loser because it is cheap relative to the group and lose $$ as it continues to go lower. Or there may be a huge opportunity cost if it underperforms.
2) You may lose money in a highflyer by buying and selling at the wrong time. You get caught up in a euphoria and buy an overextended stock then panic on a first reaction and sell.
3) Institutions push a lot of junk out the gate when buyers are eager to buy. You may end up buying unwanted merchandise that will go up a bit but promptly tank at the first sign of trouble, leaving you to hold the bag.
4) You may watch a stock in disbelief as it runs up and "buy on a pullback" because you think you are finally getting a bargain when in fact the stock is on its way down.
5) You may have an ego problem - reluctant to acknowledge a mistake early on - and argue with the market by averaging down on a stock that's going down that you THINK should be going up...
2007-09-20 08:49:50 · answer #1 · answered by Anonymous · 0⤊ 0⤋
The same "danger" as investing in a bear market.
Stocks may go up.... Stocks may go down....
Dollar cost average into the market if that makes you feel more at ease.
Get two or more books on investing. It will give you greater insight.
2007-09-20 00:42:44 · answer #2 · answered by Common Sense 7 · 0⤊ 0⤋
I would think paying too much per share would be the biggest danger.
2007-09-20 00:38:21 · answer #3 · answered by Anonymous · 0⤊ 0⤋
with the existence of greed, emotions will normally outpace human's rational.
2007-09-21 21:27:41 · answer #4 · answered by BigBen 5 · 0⤊ 0⤋