Most humans, you must understand are fundamentally driven more by their emotions than their intellect. This is very wrong because what makes humans special and different from other lesser creatures is that we have consciousness. Therefore, we shouldn't be controlled by our instincts and emotions but rather by our intelligence and awareness. When it comes to investment most times people let their emotions control them, hence make many losses.
There are some dangerous statements people make about investing that I want to discuss in this post with you.
It's gone down this much, it can't go lower - This statement is really not true, because an asset reduces in value from say $10 to $2 doesn't make it a good time to buy. Just by assuming that it can't go any lower. You must understand that it can go further down, and stay down for years to come.
It's gone this high, it can't go higher - This is also a false statement that people make. An asset or investment can do 10 times (10×) it's value and still continues to go up, till it does 50×.
It's always darkest before the day - This is another very false statement. This is still in relation to its been going down, at a point it has to start going back up. It would so surprise you that several businesses and investments have gone to 0. So you can't assume that it's going to make a U-turn.
When it reaches the amount I bought it, I'll sell - This is yet another really untrue statement people make when investing. The question now is why would you sell when it reaches the amount you bought it? Do you think that the asset is monitoring your buying point? People must realize that the asset doesn't know you own it. If an asset goes down, and then gets back up to the point where you bought it, what you should ideally be thinking is if you should buy more. This is because it's pumping, it doesn't know you bought it at that amount, the asset is pumping, most likely it would go higher than that amount. But you must investigate properly.
Conclusion - It's wrong to be making all these statements when you've not done good investigation of the asset you're buying. Always investigate before you invest. Have a personal reason that comes from logic why you're buying an asset. It's going up or coming down shouldn't drive you in.
