Emotion And Investing

Written by Awdhesh Nagar
In a recent survey conducted by popular broking house it was found that 67% investor get below index return. This is attributed to emotion like greed and fear and relying on tips and rumors among others.

Benchmark index of BSE 30 has given 15% compounding return over long period but very few investors make that kind of return. We see investor entering in a bull market relying on buy tips, stock recommendations etc. New investor put money in stocks without knowing about their business and
eventually have a bad experience in markets.

We also see investors entering with expectations of quick gain and exiting in short term with loss or low return. These investors either don’t comeback or repeat their mistake after a long time in another bull run. Stock investing is high skill job requires good knowledge of economy,industry and particular business.

Professionals employed by brokerage and fund houses are highly educated in business and finance and have a lot of experience of managing money. There are highly qualified people dedicated to research on one or two sectors only. These professionals also struggle in the market and manage to generate superior return to index with a lot of hard work.

If a person without such background and knowledge dabbles in market with return expectation, he/she is bound to be disappointed. One may end up cursing the market but it is not market fault if one does not understand it. For an average investor it is best to rely on mutual funds and let professionals do the job. Stay in a cycle of market and wait for 4-5 years at least to see good return.
About Awdhesh Nagar
Awdhesh Nagar is experienced banking and finance professional. He hasgood knowledge of economics and business-related matters.He currently runs his own organisation by the name ‘Moneylogist’ whichadvises more than 300 clients on their personal financial planning. Awdhesh is on mission to improve financial literacy. He considers himself responsible for financial wellbeing of his clients.

In past he has worked with organisation like Citigroup, GE, StandardChartered, SREI at senior level position. Awdhesh has also worked for ‘Jaipur Smart City’ project of Government of India’ as Financial Expert. He has handled investment, funding and project finance portfolio inthese organisations.

He regularly visits education institutes as guest speaker and provideshis views on budget and economic events on media. Awdhesh has done his B.Com (H) from Sri Ram College of Commerce and MBA-Finance from University of Delhi. https://www.moneylogist.com