From human weakness to invest misunderstanding!Why 'People tend to prematurely sell stocks to make money, lose money and long-term holders of the stock.' Wall Street there is an old motto:? market driven by two forces, one is greedy, one is fear The purpose of investing is to make money, but the investment will be able to make money if you can make money, how much you can do these different answers to two questions, in fact, represent a completely different investment motives;?? with different investment motives to the different investment behavior; different investment behaviors corresponding to different investment psychology today recommended an article and talk about common investment errors start with some mental Buffett's speech started: Buffett in a speech, mentioning. to errors of investment, pointed out that some people do not think the market will boom, they just think they can pick out the winners from the rest of them. He explained that although the innovation may make the world out of poverty, but the latter part of the history of innovation investors are not The following is a happy ending to his words:. 'This slide lists only half a page content, and content from a list of up to 70, which includes all US car company.' He flashed in the air Akira goes full list of 'This above 2000 car company: The car is the most important invention of the 20th century the lives of its people had a huge impact if you witnessed the birth of the era of the first car how countries because the car and developed, then you might say, 'This is an area I have to invest.' However, a few years ago more than 2,000 car companies, only three companies survived. And, before long three companies of the sale price is lower than its book value, which is lower than the amount of money originally invested company and survived. Thus, although the car to the United States had a huge positive impact, but investors have had the opposite impact . 'In this new model, the new concept of the rise of the Internet era, is called web2.0, web3.0 the dawn of time, Buffett's speech is to give us a little enlightenment it? Next, look at Xu Peng published in the' Article Shanghai Securities News ': The first misunderstanding: overconfidence and illusions of a professional survey controllability: 82% more than a year of driving experience drivers consider themselves above average Obviously, most people overestimate . their level and depth interviews with 2,499 entrepreneurs found that: 82% think their business will be successful, while only 39 percent think others will like them business success that is difficult to avoid overconfidence. Before coin thrown almost all casino betting rules, such as dice guess the size, the casino bosses discovered gamblers bet before the dice roll, significantly higher than the dice roll after completion bet is much greater. When investors make When the investment decision, he would think of themselves in the future things are large enough to grasp, it seems that he can master the future changes. And in fact you do not have any control over future events capability, simply because they participate, you will think you With the ability to control this is an illusion of control overconfidence led to actual investments, over-confidence and the illusion of control resulting in at least three questions: First, frequent trading to print out on us in 2007 stock delivery order it. We overestimate the accuracy of the information and its own capability information analysis, resulting in frequent trading will not only increase transaction costs, Air Jordan 5 but also lead us to more easily make the wrong investment decisions can not be sufficiently diversified investment: Because overconfident, leading to concentration of investment, risk concentration of investment focused on a large number of stocks and other equity products, completely lost grasp for asset allocation categories, including the Christian Democrats, the vast majority of assets last year to focus on one stock fund investments, even without considering the late how changes in market conditions in the end, from any point of portfolio and risk management, which in itself is unreasonable selective filtering: only willing to support their judgments Discount Nike Air Force 1 Unisex Pink White Shoes information, and filter out information to support their judgments , lead to more trust their own judgment. market every day there are long and short scramble Bearish Bullish various reason, capital markets so at any time, but determined to see more people tend to overlook the grounds look empty, even if these reasons are very obvious reason ? What led to overconfidence and the illusion of control information for selectively filtering second myth: pride and regret psychological cause people to avoid regrettable behavior, away from the pursuit of good behavior regret is that when people realize that before. a decision is considered to be Nice Nike Lunar Force 1 Fuse NRG Unisex Red White Shoes suffering emotional when bad; pride is when people realize that before a decision is found to be correct emotional happy when triggered by an example: a few months since you've been buying. the same set of lottery numbers, a friend suggested that you choose another set of numbers, you would change? In fact, no one knows the probability of winning is the same two sets of numbers. There are four possible cases, change the number of the original winning numbers , change the number of new winning numbers, winning numbers does not change the original number, do not change the number of a friend recommended the winning numbers. Think about what makes you regret endless, and what will make you proud. Let's look at their decision. More People do not choose to replace the numbers, the reasons behind their numbers actually not selected a high probability, but if the change, the joy of winning does not insist on bringing the joy of winning the original number is large. Also, if not for numbers you, a friend recommended winning numbers bring regret, but also far less than if the change, and the original number of their own choice, but in Nike Air Max 2012 the longer term will bring regret a more specific assumptions: You have two shares, stock A and B. A stock is currently 20 per cent profit, the stock is currently a loss of 20% B. Who would you sell? The vast majority of investors choice is to sell A and B hold, because to sell to bring their own emotional armor Happy, and sell 2015 Latest Nike Shoes B is to bring their own emotional pain - I have to wait until at least B Back to the cost price and then selling that which has been a seemingly ridiculous, but true conclusion many times happened: people tend to to prematurely sell stocks to make money, lose money and long-term holders of stock third myth: nostalgic Nike Soccer Shoes nostalgic past used to be called, is that people tend to be similar to the investment results of a risk assessment of past decisions as consideration , even very important. Why fund sales in 2007 there have been such a hot scene? not the majority of ordinary people discovered the investment value of the fund, not that they were a risk to the investment decision-making, even if only by means of bank customers expertise for risk managers decision making. They are based on a neighbor just bought a fund to make money, the children of his second uncle bought the fund to make money and other reasons, to make investment decisions. We call it 'wealth effect.' And so on his own After the investments make money, this wealth effect is even more pronounced. And in fact, slightly investment experience investors know that the risks and benefits of the investment and the past performance of the investment is not directly related, or even past high income is generally its behalf overdraft future earnings, leading to maintain high profit is very difficult to a famous psychology experiment first experiment: Requirements 95 undergraduate finance to participate or not to participate on the front and back of the coin Gambling decision, 41% of people choose to participate in the second experiment, the same educational background to find another 95 people involved in the experiment, except that, in advance by the organizers donated it to their participation in the gambling bet $ 15. As a result, 78% of people chose to participate in this is the famous 'money casino effect': in the casino, people tend not to make their money gambling as 'own', but as a 'casino', the big deal transport back to Las Vegas each casino, as long as you stay at the hotel, the room is almost always presented a bit chips, this is the genius of the casino owners. Similarly, in the general investment decisions, once previous investment decisions made money like this, many people tend to judge the two: the first is just about to use the experience Popular Nike Air Force 1 High Womens Black Green Shoes to determine whether this is a good investment, continue to invest even append a second judge: this money is white earned, not me, to continue to invest, at worst lose it. Therefore, we continue to see people continue to additional investment in the course of the bull market. The 'love of the past' as a psychological misunderstanding, not to deny the summary investment importance of experience must admit, behind the capital market has to maintain the basic laws of its operation where it is difficult to change. But we also believe that this same law, but it is a wide variety of forms . In the end of 2005 to the current market as an example: in 2006, when we are immersed in a secular bear market thinking; 5.30 hard crash Let preliminary summary of junk stocks, stocks, st stock market have revolutionized; when we It took months before finally delighted to discover the value of investments, long-term holding, when the blue-chip resource stocks, long-term holders of letting us suffer deep. not the capital market is not the law, but we know enough It is our superficial knowledge of its laws, may lead to a greater loss then, I heard something that our industry veteran memorable words: a lot of money by wisdom, make a little money by technology, lose money by knowledge. Fourth Myth: Psychology Research representative thinking and familiarity thinking discovered that the human brain use shortcuts to simplify the analysis process information using these shortcuts, the brain can estimate an answer without analyzing all the information which will undoubtedly improve. efficiency of the brain, but also makes it difficult to correctly analyze the new information to draw the wrong conclusions. Representative thinking to analyze and judge based on a fixed pattern that things with similar characteristics are the same familiar thinking are that people like familiar things, when making investment decisions as well. often someone with a fund, with a stock of repeated operations. If it is out of the company, the fund companies and fund managers, long-term, in-depth understanding, This operation is understandable. But in fact, most people are not. They concern or operate certain securities types, simply because 'I always do that.' just like the fans always support the local team the same. Let's look at US pension plans 401k example. The study found that 42% of assets invested in 401k pension plans of the Company. because they are familiar with their company, often resulting in the proportion of investment in the company is too high, and this is very dangerous. For example, Enron plans to invest in the proportion of up to 60% of the company, bankruptcy leading to the loss of pension plans are summarized in terms of the $ 1.3 billion: Familiar thinking leads to two problems: first, to overestimate their own familiar investment goods investment value; second, investment concentration familiar and greatly improved because only two issues together, that is the big problem of the investment is high IQ of the game, in this game, only beat themselves, to beat others. Since called mental errors, it can not be completely avoided, but for sure these errors can help us as much as possible to avoid this kind of mistake Finally, we once again widely read Buffett's famous quote: I like most investors . Like, will greed and fear, but I differ with most investors is the greed of others, I fear; when others are fearful, I am greedy.