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From greed to fear the psychology of investment through the cycle


Countless 100%cashbackforexvestors with personal experience to warn later, to properly h forex cashback easyle the cashbackforexpip process of greed and fear of the relationship: when others are greedy to fear a little, when others are afraid to be greedy some but investment cashbackforex learning by doing, features particularly obvious work, and then more advice in most cases for most investors actually does not work In the authors opinion, the Investment success to have three major elements: unique investment ideas, good training and excellent investment psychology in general, the three constitute an organic whole is a guarantee of long-term stable excess returns in different occasions, the importance of the first two are constantly stressed and repeated, but the investment psychology is easy to ignore out of the intuition of most investors is that good psychological quality is often the decision to win or lose the investment portfolio The theoretical foundation of the modern asset management industry is built on asset pricing models, the understanding of portfolio management is also broken down into three technical aspects of asset allocation, industry allocation and individual stock selection This approach has standardized the industry, but with the expansion of management scale, the average rate of return is also gradually moderate The investment community is more reflective from the perspective of matching the cost and excess returns of active investment, but in-depth analysis of this approach The rationale for this approach, we can easily find the shadow of investment psychology, that is, about the assumptions about the relationship between the overall forexcashbackeasy and specific assets, the so-called alpha or beta and other parameters more reflect the psychological expectations of investors For risk, there are different types of investors, of which the majority of risk averse different types of investors reflect different investment psychology Through the years of observation of the habits of investors around, I believe that the best Through the stock market cycle of investment psychology there are three ideas: First, a stable, actionable investment philosophy and good investment discipline market ups and downs, investors from greed to fear, and then back to the cycle of greed is the inevitable product of all stock market fluctuations, but also human nature The first idea is to control the investment psychology from the perspective of portfolio management with the stock market short-term trends unconscious fluctuations, with a stable and actionable Statistics from academia and investment practitioners show that, on average, out of 250 trading days in a year, there are no more than 20 major trading days that play a key role in the portfolio. Therefore, in most cases, we do not encourage frequent judgment and adjustment of asset allocation and sector allocation, because this will indirectly lead to frequent Even with a strong psychological profile, it is difficult for a normal investor to not miss these major trading days with a unique investment perspective and good training. Once the psychological distraction of investing is involved, it is almost certain that the likelihood of not losing ones footing and catching these major trading days is minimal. Second, for most assets The combination of following the law of reversion to the mean and judging the changes in the asset boom cycle is a better strategy to overcome the psychological disturbances of investing. In the absence of additional information, the thinking pattern of most investors is to follow probability judgments: the short term shows linear extrapolation characteristics, whether it is analyzing the graphs of the exchange rate or predicting the prospects for changes in cashback forex earnings, which is a reflection of probability judgments, reflected in the currency market is trend investing; In the medium and long term, it shows the characteristics of reverse regression, which is reflected in the currency market is to sell the most profitable currency pairs and make up for the biggest losses. This investment psychology is difficult to control in a greedy or fearful market, and a better strategy is to combine the boom cycle of these assets to grasp the turning point of linear extrapolation and reverse regression. Once again, for the real sense of growth assets, we need to prevent the investment psychological interference is the other direction, that is, in the early stage of currency growth, because of the rise of the currency pairs sold too early or afraid to buy currency pairs growth assets are scarce resources, in any currency market belongs to the minority of these currencies will also be with the fluctuations of the currency market Ups and downs, and even the magnitude is not small These are the time to test the investment psychology in my opinion, treat the real growth class assets, first, with a unique investment perspective and good training to judge the sustainability of its business model, analysis of the industry landscape and its competitive advantages, locking the target; second, to have good psychological quality, the currency through the industry cycle of confidence in the ability to cross the basis from greed to fear in the currency market cycle!