One time in college, we were in the middle of discussing about the ten axioms of financial management when I asked my seatmate Rex, where do you keep some of your allowance?
"I'm in to the stock market since financial management is my major."
Excitingly, I asked how do you get into investing? I was always enthusiastic about the market since my sociology teacher introduced it.
"I just buy stocks at it's low price and sell it when the price is right."
The world of investing is so broad, millions flock the market hoping to take the opportunities it presents. Most of the reasons include better education for their kids, pay bills, traveling and retirement.
This is where the danger comes, they will be emotionally attached to their own money driving them to make irrational decision making. When someone has a couple of hundred bucks and has a scheduled utilities bill next month then he thinks putting it to an exchange hoping to ride the bull run and take some profit. But, it’s cyclical and the bears took over immediately then he waits for recovery and subsequently sells it at a loss since his bill nears its due.
When you search the internet, read books, listen to self-acclaimed financial gurus, friends and family members, they will present ways how to make money and to outperform the market.
Daily chart posts, insane price prediction, circulating unconfirmed news, opinions where the market is headed, financial institutions and government regulations entering the scene.
When we have discipline, then we can have wisdom. When we acquire wisdom, we can have the right goal. When we the right goal, then we can have right plans. Then if we have the right plans, we will able to execute it properly. An investor buys a business as if he owns it, an intelligent investor.