Investments & Investor Behaviour

Being in the Investment Field since the past 18 (Eighteen Years.) I have experienced the behaviour of Investors of being instinctive. People tend to invest in shares when the Markets have peaked as though there is no tomorrow.

The Press, Electronic Media tend to give an exaggerated version of the events unfolding. When the Markets have peaked they give the information that the Index is going to touch stratospheric levels. The two main Elements of Stock Market Greed and Fear should be controlled. Markets are just a place were shares of different companies are bought and sold. Many people blame the market for losses they inccur in their trades. But, what happens in the Market are just a reflection of what is happening in the Country or Economy.

As of now, we see the Markets are down to a great extent because of the decline in demand for the goods produced. So, decline means less sales which will inturn be less profits. So, the price of shares do decline.

The Investors must be careful while buying or selling shares. It is better they consult Experts like their Stock Broker. Not that, the Stock Broker is always right but, he or She will be in a far better position to judge the Market than the Lay man because it is his proffession.It is always better to know that when the rates are very high it is better to sell off the shares as they have peaked up. As the saying Whatever has gone up has to come down. Similarly, whatever has come down has to go up. Now, when the Economy is in shambles shares are down. There will be lot of lay offs and restructuring going on. Profits have to increase after some period of time but the wait will be a little long. Now, Stocks will be quoting at lows than they deserve to be, so it is better to buy these shares and make good the profits when they go up. There is always an opportunity of a little gain if you are a regular Trader, in my experience you can make a profit of 30% per year if you are sticking to your principles of trading.

ie, you can be content with a profit if you gain a certain percentage gain say 10 % or 15%. If you are a LOng term Investor you can hold it for long ie one year you get zero tax. If you are a starter it is better to opt for selling your shares at a certain percent of profit and once you get more money by trading you can accumulate money, and buy for long term.

One of the British Investors have said It is good to Buy when there is blood on the streets.