Mistakes to avoid on the stock exchange
The stock market brings high profits in the long run, but the investor must avoid many pitfalls … Learn in this slide article written on July 25, 2019, which mistakes you should not commit under any circumstances.
Investing without having set clear rules
When they’re wrong, investors tend not to admit it. « And to avoid the feeling of regret they associate with realizing a loss, they often wait too long before cutting a loss, » criticizes Tatjana Puhan, head of multi-asset and equity management at Swiss Life Asset Managers France. Conversely, they get nervous too quickly at the thought of losing a security’s gains and therefore tend to cap their winning positions too early, she says. « One solution to this behavioral bias is to aim for a price target, which must be strictly defined depending on a security’s valuation. And an investor can set the amount of maximum loss they are willing to take to avoid too much emotion in their sell decision, » she recommends.