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Neeraj Chauhan is a Certified Financial Planner and CEO of The Financial Mall. The Financial Mall is a financial supermarket & in operation for over 20 years. It manages total financial affairs of clients through wealth management and financial planning Process.

Friday, August 5, 2011

Mind Over Money or Money Over Mind

"How Could I Have been Such an Idiot?" if you have never yelled that sentence at yourself in a fury, you are not an Investor.

The findings suggests that much of what we've been told about investing is wrong. Theoretically, The more we learn about our investments, and the harder we work at understanding them, the more money investor will make.

In Practice, however, these assumptions often turnout to be dead wrong. Investors habitually are their own worst enemies, even when they know better.

  • Everyone knows that they should buy low and sell high- and yet, all too often buy high and sell low.
  • Everyone knows that beating the markets is nearly impossible- but just about everyone thinks he can do it.
  • Everyone knows that panic selling is a bad idea- but a company that announces it earned 4 rupees per share instead of 5 rupees per share can lose 5 billion of market value in half a minute.
  • Everyone knows that market strategist can't predict what the market is about to do- but investors still hang on every word from the financial pundits who prognosticate on TV.
  • Everyone knows that chasing a hot stock is a sure way to get burned-yet millions of investors flock back to the flame every year. many do so even though they swore, just a year or two before, never to get burned again.
we all know that it's hard to control the impulsive behavior, many investors also know that faster they chase their financial dreams, the faster they go absolutely nowhere but still unable to learn from their mistakes.

Ideally creation of wealth is very simple, it needs 

  • Realistic and achievable objectives.
  • Calm and patient investing.
  • Investing according to the Risk profile.
  • Use the news and tune out, Ignore the noise in the market.
  • Give time to the investments instead of timing the investments.
  • Appropriate asset allocation and timely re-balancing of Portfolio.



Vikas Rajput said...

True Insight into the minds of the Great Indian Investor !

Its amazing that almost all the investors read and talk about these things but most of us fail to implement them.

Whenever the markets rise and we see a fellow friend/family member's stock investments growing up, we get lured and end up buying on a high.

Same holds true to the market crash, the fear of losing big, results in panic selling and hence the loss.

I believe that the beautiful advise of this blog will help many re-think about their investment planning.

A great start !

Keep it up !

Ajay said...

A good read! Great work, keep it up!

Puneet Oberoi said...


Absolutely true .

What you have posted is what we have experienced in our practice .

We are being preaching this for so many years , but people tend to forget everything at that time & panic button is pressed , they loose out their patience & exits at the lowest .

Waseem Mahajan said...

Tahnks for your insights.

I have done a mistake in past by buying when stock investments were growing up.

Kanwar Jot Singh said...

wonderful insight... looking forward to more such learnings!!!!!