Understanding the cycle of investing may help you avoid easy pitfalls. Watch the video below.
Transcript:
Investing should be easy. Just buy low and sell high but most of us have trouble following that. Why is it so hard? It has to do with fear, greed, and something called the investment psychology cycle. As the market cycles upward, greed drives investors to jump in, but they may pay too high a price. When the market cycles downward, fear sets in, and investors may sell often at a loss. Want a real world example? Between February 12th and march 23rd 2020, The Dow Industrials lost 37% of its value. The drop offered a potential opportunity to buy low but instead, some panicked and sold. How to you break the cycle? Discipline and sound advice may help. Don’t get greedy the market rises and don’t panic when it falls. Stay balanced, stay diversified, and stay patient and you may come out on top.
