Why so many people lose in the stock market

Posted by on October 10th, 2008 at 07:05pm

Thomas J. Mertz wrote an interesting post today on
Here’s a quick excerpt

Even though everyone loves the underdog, nobody likes a loser. This is why people who live life on an emotional level do poorly in high finance. To them, the market looks more like a race than an investment. The strategy for the emotional investor goes as follows:
They buy a “winner” and expect it to keep winning.  If it doesn’t and starts losing value, it is labelled a loser and dumped with hopes for better returns on the next “winner”.
That is called buying high and selling low. It is emotional investing. People have been selling like mad these last couple of weeks and the only thing keeping the Dow from going any lower is the objective investors who are taking advantage of the enormous buying opportunities that wil make them very rich once this market correction has run it’s course.
Buying low and selling high goes contrary to inbred, western philosophy. It […]

Read the rest of this great post here

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