MERCADO DE ACOESSTOCK MARKET

Beware of short term traps

Beware of short term traps

 

I discourage copiers from making knee-jerk reactions to news. Instead, I ask copiers to thoughtfully contemplate exactly what impact a particular event might or might not have on the companies whose stock my portfolio own.

 

Nevertheless, it’s hard to resist. When you see someone who sounds smart on financial TV talking up a stock, it makes you want to buy in before you miss out on a big opportunity. Yet as soon as the very next segment, you might hear from someone with the exact opposite view on that same stock. The conflict can leave you feeling completely confused.

 

The simplest way to avoid letting the pace of news affect your investing is to turn it off. However, cutting the cord isn’t an option for many people. Another smart move is to set rules for yourself on how you respond to information you get on financial news. One example is to decide that you will always wait at least a set period of time — two weeks or a month, perhaps — before buying or selling an investment based on what you heard. That gives you time to do your own due diligence and decide whether it was just an emotional reaction or a legitimate investment opportunity.

 

If you’re concentrating on the long haul, what happens in two weeks or a month will be insignificant compared to the potential long-term gains from a successful find — and could help you avoid a big mistake if, on further reflection, you decide not to invest at all.

 

Thanks for reading

 

Santiago

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