Trading can give you the most mature adrenaline rush youve ever had.
Sorry to say, like many other things, its not good for you in large amounts.
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They found over-trading was linked to thrill-seeking, overconfidence, desperation, and even gender.
According to the study, Mens tendency to trade aggressively and the resulting trading costs drag down mens returns.
Remember, smart trading isnt about earning boatloads of cash and spending it.
Transaction fees and taxes should be factored into your planning.
The problem is, most investors dont seem to diversify enough.
Idiosyncrasy was the main culprit.
They found that many investors continue to have a large amount of their portfolios invested in company stock.
One of the worst financial decisions is to follow stock trading advice from popular TV hosts.
TV personalities need to make their shows entertaining by adding in as many Buy Nows!
Sells as they can (fog horns and flashing letters help too).
The inspiration for Clooneys character is commonly known to be CNBCs host of Mad Money, Jim Cramer.
In his typical manner, Cramer himselfadmitted, This show is not about picking stocks.
Its not about giving you tips that will make you money overnight tips are for waiters.
One common mistake he sees new investors make is onlyinvesting in large well-known companies.
Instead, he suggests buying more stock from smaller companies.
According to Carroll,
Right now,Amazonis trading at over $1,000 per share.
What are you going to do, buy one share?
People are doing that, but its not even worth the purchase.
You wont ever have enough shares to see that strategy mature.
It now pays to do good.
He calculated that 66 percent of all investments that went up were sold around this 20 percent mark.
However, 61 percent of these continued to go up in value after being sold.
The most successful investors are connoisseurs.
Even if these investors werent successful in picking winners, these gains made them more successful overall.
Not all of us can be trading connoisseurs, at least not right away.
Not learning from trade fails
Losing money in a trade can be tough.
Its commonly said that one of the biggest mistakes new investors make is to get emotional.
According to trading psychologist, Dr. Brett Steenbarger, whats more important is what you do with this emotion.
Every investment you make should be guided by analyses, logic, and planning.
You will lose some of the time, but by avoiding these mistakes, you could also win big.
