In part 1 of success mentality for investing, we covered the basic idea that a good state of mind is perhaps the most important asset you can possess. We will now move forward with this subject and address the ways in which you can improve your thinking and adopt the psychology of investment pros.
The first thing we’ll go over is probably the most obvious mode of behavior you can keep in mind when looking to make solid investment choices. Nonetheless, it’s also the one that’s hardest to master, especially in a field where stock values can suddenly surge or vanish overnight.
Avoid Panic With Your Investments
Basically, when facing the volatility of the stock market, avoid panic. This can’t be stressed enough. Panic is an emotion that destroys your ability to make sound choices and maintain sensible perspective on things. If you allow yourself to be overruled by this dangerous feeling, you’ll end up only making irrational choices that you’ll soon regret.
The stock market is a dangerous place for newcomers, and it’s still something that even the best investors will say that you can never stay comfortable with, because the future is always changing, and what’s valuable today could be gone in an instant tomorrow, and a single wrong choice may very well ruin all your assets.
Because of this, panic is exactly what happens most often to investors when they see the crazy changes of Wall Street (or their stock market of choice). They up liquidating their stocks or rushing to what they see as safe purchases – all without a clear head.
Alright, so we know that panic is a terrible thing. Still, it happens often. That’s natural. What do you do? The solution for panic is to keep it minimal and employ it as a positive factor to motivate you to succeed even harder with investments. In a market where nothing is guaranteed, you never want to rest. Instead, look to make your fear of unemployment or bankruptcy a matter that drives you to achieve your best under any circumstances.
That about covers it for now. We have a lot more to factor into this series, and plenty of ground to cover still. Hopefully you’ve learned a few things with this entry. Stick around and anticipate the next entry of developing the success mentality for investing!
Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 – 2010
{ 7 comments… read them below or add one }
I have just yesterday downloaded your free book: ‘The Bullhunter Journal’. As always, you have a great way of making sense of subjects of complexity in an easy-to-read, and plain-talking format. I look forward to learning heaps. Thank you for your insights.
And as for today’s post, it seems to me that panic is probably one thing that we all need to check ourselves for in all aspects of our lives. A very sensible outlook, if I might say so.
Hi Jo
Glad you got the free e-book and are enjoying it. As for panic, investors need to remove this word from their lives and replace it with the correct mentality for success
Regards – Sean
I really should avoid panic because honestly, I haven’t started investing yet on stocks because I’m afraid to gamble and would rather invest it on something else. Upon reading your article, the part 1 particularly, I’m again interested to really try it out. Just have to change my mindset.
Hi Christina
If you are looking at investing as a gamble and you are fearful of it, it may be wise to put it off for a while until you feel more confident. Whatever you invest in, you must be super confident of your choice. A good rule of thumb is to never invest money unless you can afford to lose it
Regards – Sean
Thanks for the advice Sean…it took awhile before I was able to visit your blog again. Nice to hear you really interact with your followers. Kudos.
Great to see you back Christina
Hi Sean,
Panic is a natural emotion but it’s one you want to try to avoid. I think people make bad decisions when they panic. I’m not sure but would having an investment plan help with this?
I mean if you had your investments planned out and knew when you were going to sell and buy; wouldn’t that make a difference? You could just stick to your own plan and avoid the panic? Or, is panic an inevitable part of investing?