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Two Emotions That Can Sabotage Your Investing

As the financial crisis has unfolded, many American investors have felt like an orphan without a parent in the stock market. This has resulted in a number of investor's deciding to just ignore their stock market studies and let their emotions take over their trading decisions.

Unfortunately, this is a risky situation because emotions are easily provoked and can lead investors into making irrational decisions. So, if you're finding that you're letting your emotions take over your investing, you need to understand the two emotions that can sabotage your investing are fear and greed.

Fear is a physical feeling that arises when you're about to be harmed by your investing. If you're scared, you pull your money out of a stock or pull back on your stock portfolio until you feel safe again. However, greed is another emotion that can also be triggered when you're making money but you feel like you're getting too much. If you feel like you've gotten way too much out of your investments, you may try to get some of that money back by buying more stocks or changing your portfolio.

However, we now live in an era of instant communication. If someone in the world is making money from trading, whether it is online or through TV/Media then that's a huge motivation to learn how to invest. So, it can be tempting to become an expert at something and just make sure you can do it in real time. However, that's an extremely dangerous strategy to follow because it can actually result in investors being terrified of instant communication due to their feelings of greed. So, in order to become a successful investor, you need to take a middle road. Instead, use technology and other resources to become an expert.

In the end, you have to understand that emotion can be a powerful driving force for investing but it's your goal to become an expert at investing while keeping your emotions in check.

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