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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » Five Bear Market Mistakes

Five Bear Market Mistakes

Go down  Message [Page 1 of 1]

1Five Bear Market Mistakes Empty Five Bear Market Mistakes Thu Nov 17, 2011 2:25 am

sriranga

sriranga
Co-Admin
It's easy to forget the mistakes we make. That's a mistake in itself. Here are five traps to avoid during a bear market.

1. Focusing on our short-term performance
One Fool reader once commented that a long-term, buy-and-hold strategy is a short-term strategy gone wrong. Sometimes that's true, but I think it's fair to say that most investors buy into the market with the aim of making money over years rather than months or weeks.

Indeed, over the next few decades, we're all going to be buying a lot of shares, aren't we? That's why we should be content with prices being low. Remember, it's at the end of the investment life that you get the greatest profits from compounding.

For the same reason, we shouldn't get overly concerned during bear markets. Prices do fall from time to time. Perhaps we'll have some extra cash in that period to invest further in quality shares. Regular investors should like bear markets and shouldn't be too bothered about solid shares under-performing for a while.

2. Becoming enduringly bearish
Who knows when 'the right time' to invest is? Economic indicators are wrong at least as often as they are right, and as mysterious as the Delphic Oracle's mutterings.

Let's say you disagree and want to time the market a little. If it's a rising market then things can quickly look over-priced. Only a madman would get in, wouldn't he? In a falling market, prices could just keep sinking, so you'd be crazy to buy something that's decreasing in value. But now we've reached the bottom and it's climbing again. Or is it? Is this a fake bottom, or a 'dead-cat bounce'? Or a dead-cat's fake bottom? Negativity is insidious, and a bit rude.

If you find yourself constantly negative, you'll worry so much about the right time to invest that you'll miss it by a great margin. The stock market, on average, rises more often than it falls and outperforms other investments (or at least it has historically). On that basis, the best time to invest is always now (or more precisely, as and when you have spare money to invest).

There are extremely rare times when all indicators are overwhelmingly in agreement (including the Delphic Oracle), but in general I don't think we shouldn't worry too much about exactly when we get into the market. It's far more important to ensure you spend most of your time invested and you put in as much money as you can reasonably afford.

3. Believing financial journalists are experts
I'm shooting myself and my colleagues in the feet for you. Hope you appreciate it. Thing is, what sells newspapers is what's happening now, not what's likely to happen to the stock market in 30 years. Papers love to be negative, so in a bear market they're extremely happy.

Journalists are not hired for their moderate views or long-term commitment to improving your wealth. They're hired to sell papers. Anyone who just buys shares and holds them forever isn't going to be all that interested in reading the financial pages on a regular basis, and so journalists don't write for this audience. If they do, the editor deletes the clause 'but...' from the phrase: 'A top economist predicts market crash, but...'
The most successful investors do their own research; they don't rely on papers to make buying or selling decisions.

4. Not spending enough time on your investments
Before you get addicted to buying and selling shares, it's tempting for beginners to just get buying, especially if their friend, mother or local pub landlord says that he's buying this or that share because he can't lose. No one should leap into stock-picking like that.

If you want to invest in a hurry, read up about index trackers and ETFs. Read everything you can on them. Take a look at what people are saying about them on our discussion boards and ask your questions there. It should take you just a few hours a day for a week or two to get comfortable with the idea of them. That's not much effort to lay the foundations of your future financial security.

Once your money is invested relatively safely, you can then take the time to truly learn what on Earth it is you're getting into when you're looking at individual shares. May I suggest you be as cynical about them as you like? Keep digging to find out what's wrong with the company and only then, if you find nothing serious, can you buy. In other words, concentrate on what might go wrong with a share before you consider what might go right. Your wallet will thank you for it.

5. Spending too long on your investments
On the other side, once you've got used to investing it can begin to get you a little too excited. Lots of people check their shares every morning or several times a day.

You know your friend who goes to the gym, and working out is all he talks about? Or how much your other friend talks about just clothes and fashion? You know how boring that is? You know how much you wish they'd just get a life? Well then.

Keep a balance. By not over-doing it, it'll also help you resist the costly temptation to over-trade. But that's going into a sixth mistake, and I just promised you five.
BY
Neil Faulkner
http://www.fool.co.uk/news/investing/investing-strategy/2009/03/26/five-bear-market-mistakes.aspx?source=isesitlnk0000001

http://sharemarket-srilanka.blogspot.co.uk/

2Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Thu Nov 17, 2011 5:27 am

Aamiable


Vice President - Equity Analytics
Vice President - Equity Analytics
6. bringing IPO on top of that
7. credit clearace force selling.
8. other mistakes
9. ignoring foreign investments and global ressession on top of that

and so on...

3Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Thu Nov 17, 2011 8:49 am

WildBear


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@sriranga wrote:It's easy to forget the mistakes we make. That's a mistake in itself. Here are five traps to avoid during a bear market.

1. Focusing on our short-term performance
One Fool reader once commented that a long-term, buy-and-hold strategy is a short-term strategy gone wrong. Sometimes that's true, but I think it's fair to say that most investors buy into the market with the aim of making money over years rather than months or weeks.


You spot on, Good work;

4Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Thu Nov 17, 2011 9:53 am

zenobia


Manager - Equity Analytics
Manager - Equity Analytics
you all tend to forget that we have price bands that will be imposed mainly when the market is going up and a host of other shackling laws.

5Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Sat Nov 19, 2011 5:10 pm

Aamiable


Vice President - Equity Analytics
Vice President - Equity Analytics
natural disasters, Debentures , incresed taxations, devaluation of currency....and lot of other factors can have an adverse impact on the markets...

6Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Sat Nov 19, 2011 5:18 pm

rijayasooriya

rijayasooriya
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@WildBear wrote:
@sriranga wrote:It's easy to forget the mistakes we make. That's a mistake in itself. Here are five traps to avoid during a bear market.

1. Focusing on our short-term performance
One Fool reader once commented that a long-term, buy-and-hold strategy is a short-term strategy gone wrong. Sometimes that's true, but I think it's fair to say that most investors buy into the market with the aim of making money over years rather than months or weeks.


You spot on, Good work;
sri:-Is this written by u or by Neil Faulkner ? I can remember such a person here also Laughing Laughing Laughing

7Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Sat Nov 19, 2011 5:24 pm

sriranga

sriranga
Co-Admin
@rijayasooriya wrote:
@WildBear wrote:
@sriranga wrote:It's easy to forget the mistakes we make. That's a mistake in itself. Here are five traps to avoid during a bear market.

1. Focusing on our short-term performance
One Fool reader once commented that a long-term, buy-and-hold strategy is a short-term strategy gone wrong. Sometimes that's true, but I think it's fair to say that most investors buy into the market with the aim of making money over years rather than months or weeks.


You spot on, Good work;
sri:-Is this written by u or by Neil Faulkner ? I can remember such a person here also Laughing Laughing Laughing

I'm sharing the articles which I read in the various sites.
This particular one which I read in www.fool.co.uk.
Just for the clarification.

http://sharemarket-srilanka.blogspot.co.uk/

8Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Sat Nov 19, 2011 5:30 pm

SL.Market

SL.Market
Vice President - Equity Analytics
Vice President - Equity Analytics
@sriranga wrote:It's easy to forget the mistakes we make. That's a mistake in itself. Here are five traps to avoid during a bear market.

1. Focusing on our short-term performance
One Fool reader once commented that a long-term, buy-and-hold strategy is a short-term strategy gone wrong. Sometimes that's true, but I think it's fair to say that most investors buy into the market with the aim of making money over years rather than months or weeks.

Indeed, over the next few decades, we're all going to be buying a lot of shares, aren't we? That's why we should be content with prices being low. Remember, it's at the end of the investment life that you get the greatest profits from compounding.

For the same reason, we shouldn't get overly concerned during bear markets. Prices do fall from time to time. Perhaps we'll have some extra cash in that period to invest further in quality shares. Regular investors should like bear markets and shouldn't be too bothered about solid shares under-performing for a while.

2. Becoming enduringly bearish
Who knows when 'the right time' to invest is? Economic indicators are wrong at least as often as they are right, and as mysterious as the Delphic Oracle's mutterings.

Let's say you disagree and want to time the market a little. If it's a rising market then things can quickly look over-priced. Only a madman would get in, wouldn't he? In a falling market, prices could just keep sinking, so you'd be crazy to buy something that's decreasing in value. But now we've reached the bottom and it's climbing again. Or is it? Is this a fake bottom, or a 'dead-cat bounce'? Or a dead-cat's fake bottom? Negativity is insidious, and a bit rude.

If you find yourself constantly negative, you'll worry so much about the right time to invest that you'll miss it by a great margin. The stock market, on average, rises more often than it falls and outperforms other investments (or at least it has historically). On that basis, the best time to invest is always now (or more precisely, as and when you have spare money to invest).

There are extremely rare times when all indicators are overwhelmingly in agreement (including the Delphic Oracle), but in general I don't think we shouldn't worry too much about exactly when we get into the market. It's far more important to ensure you spend most of your time invested and you put in as much money as you can reasonably afford.

3. Believing financial journalists are experts
I'm shooting myself and my colleagues in the feet for you. Hope you appreciate it. Thing is, what sells newspapers is what's happening now, not what's likely to happen to the stock market in 30 years. Papers love to be negative, so in a bear market they're extremely happy.

Journalists are not hired for their moderate views or long-term commitment to improving your wealth. They're hired to sell papers. Anyone who just buys shares and holds them forever isn't going to be all that interested in reading the financial pages on a regular basis, and so journalists don't write for this audience. If they do, the editor deletes the clause 'but...' from the phrase: 'A top economist predicts market crash, but...'
The most successful investors do their own research; they don't rely on papers to make buying or selling decisions.

4. Not spending enough time on your investments
Before you get addicted to buying and selling shares, it's tempting for beginners to just get buying, especially if their friend, mother or local pub landlord says that he's buying this or that share because he can't lose. No one should leap into stock-picking like that.

If you want to invest in a hurry, read up about index trackers and ETFs. Read everything you can on them. Take a look at what people are saying about them on our discussion boards and ask your questions there. It should take you just a few hours a day for a week or two to get comfortable with the idea of them. That's not much effort to lay the foundations of your future financial security.

Once your money is invested relatively safely, you can then take the time to truly learn what on Earth it is you're getting into when you're looking at individual shares. May I suggest you be as cynical about them as you like? Keep digging to find out what's wrong with the company and only then, if you find nothing serious, can you buy. In other words, concentrate on what might go wrong with a share before you consider what might go right. Your wallet will thank you for it.

5. Spending too long on your investments
On the other side, once you've got used to investing it can begin to get you a little too excited. Lots of people check their shares every morning or several times a day.

You know your friend who goes to the gym, and working out is all he talks about? Or how much your other friend talks about just clothes and fashion? You know how boring that is? You know how much you wish they'd just get a life? Well then.

Keep a balance. By not over-doing it, it'll also help you resist the costly temptation to over-trade. But that's going into a sixth mistake, and I just promised you five.
BY
Neil Faulkner
http://www.fool.co.uk/news/investing/investing-strategy/2009/03/26/five-bear-market-mistakes.aspx?source=isesitlnk0000001

If i was fortunately enough to have some powers here... I made sriranga as moderator or some reputed position here. What a nice and valuable post are offered by sriranga.... keep going on your great work for the public interest.
Thanks so much....

9Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Sat Nov 19, 2011 5:57 pm

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@SL.Market wrote:
@sriranga wrote:It's easy to forget the mistakes we make. That's a mistake in itself. Here are five traps to avoid during a bear market.

1. Focusing on our short-term performance
One Fool reader once commented that a long-term, buy-and-hold strategy is a short-term strategy gone wrong. Sometimes that's true, but I think it's fair to say that most investors buy into the market with the aim of making money over years rather than months or weeks.

Indeed, over the next few decades, we're all going to be buying a lot of shares, aren't we? That's why we should be content with prices being low. Remember, it's at the end of the investment life that you get the greatest profits from compounding.

For the same reason, we shouldn't get overly concerned during bear markets. Prices do fall from time to time. Perhaps we'll have some extra cash in that period to invest further in quality shares. Regular investors should like bear markets and shouldn't be too bothered about solid shares under-performing for a while.

2. Becoming enduringly bearish
Who knows when 'the right time' to invest is? Economic indicators are wrong at least as often as they are right, and as mysterious as the Delphic Oracle's mutterings.

Let's say you disagree and want to time the market a little. If it's a rising market then things can quickly look over-priced. Only a madman would get in, wouldn't he? In a falling market, prices could just keep sinking, so you'd be crazy to buy something that's decreasing in value. But now we've reached the bottom and it's climbing again. Or is it? Is this a fake bottom, or a 'dead-cat bounce'? Or a dead-cat's fake bottom? Negativity is insidious, and a bit rude.

If you find yourself constantly negative, you'll worry so much about the right time to invest that you'll miss it by a great margin. The stock market, on average, rises more often than it falls and outperforms other investments (or at least it has historically). On that basis, the best time to invest is always now (or more precisely, as and when you have spare money to invest).

There are extremely rare times when all indicators are overwhelmingly in agreement (including the Delphic Oracle), but in general I don't think we shouldn't worry too much about exactly when we get into the market. It's far more important to ensure you spend most of your time invested and you put in as much money as you can reasonably afford.

3. Believing financial journalists are experts
I'm shooting myself and my colleagues in the feet for you. Hope you appreciate it. Thing is, what sells newspapers is what's happening now, not what's likely to happen to the stock market in 30 years. Papers love to be negative, so in a bear market they're extremely happy.

Journalists are not hired for their moderate views or long-term commitment to improving your wealth. They're hired to sell papers. Anyone who just buys shares and holds them forever isn't going to be all that interested in reading the financial pages on a regular basis, and so journalists don't write for this audience. If they do, the editor deletes the clause 'but...' from the phrase: 'A top economist predicts market crash, but...'
The most successful investors do their own research; they don't rely on papers to make buying or selling decisions.

4. Not spending enough time on your investments
Before you get addicted to buying and selling shares, it's tempting for beginners to just get buying, especially if their friend, mother or local pub landlord says that he's buying this or that share because he can't lose. No one should leap into stock-picking like that.

If you want to invest in a hurry, read up about index trackers and ETFs. Read everything you can on them. Take a look at what people are saying about them on our discussion boards and ask your questions there. It should take you just a few hours a day for a week or two to get comfortable with the idea of them. That's not much effort to lay the foundations of your future financial security.

Once your money is invested relatively safely, you can then take the time to truly learn what on Earth it is you're getting into when you're looking at individual shares. May I suggest you be as cynical about them as you like? Keep digging to find out what's wrong with the company and only then, if you find nothing serious, can you buy. In other words, concentrate on what might go wrong with a share before you consider what might go right. Your wallet will thank you for it.

5. Spending too long on your investments
On the other side, once you've got used to investing it can begin to get you a little too excited. Lots of people check their shares every morning or several times a day.

You know your friend who goes to the gym, and working out is all he talks about? Or how much your other friend talks about just clothes and fashion? You know how boring that is? You know how much you wish they'd just get a life? Well then.

Keep a balance. By not over-doing it, it'll also help you resist the costly temptation to over-trade. But that's going into a sixth mistake, and I just promised you five.
BY
Neil Faulkner
http://www.fool.co.uk/news/investing/investing-strategy/2009/03/26/five-bear-market-mistakes.aspx?source=isesitlnk0000001

If i was fortunately enough to have some powers here... I made sriranga as moderator or some reputed position here. What a nice and valuable post are offered by sriranga.... keep going on your great work for the public interest.
Thanks so much....

Yes SL.market,

As I mentioned before also Sri Ranga , within a short period of time has posted so many useful articles to the forum. He is one of up and coming stars of the forum and he deserves it.





10Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Sat Nov 19, 2011 6:24 pm

bakapandithaya

bakapandithaya
Vice President - Equity Analytics
Vice President - Equity Analytics
Thankx sriranga

11Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Tue Nov 22, 2011 12:33 am

Aamiable


Vice President - Equity Analytics
Vice President - Equity Analytics
Thanks for infomation. back to green again.

12Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Thu Nov 24, 2011 11:40 am

Aamiable


Vice President - Equity Analytics
Vice President - Equity Analytics
Local investors have to get together and invest as much as possible and rebuild the market. ...

13Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Sat Jan 21, 2012 5:39 pm

Kumar

Kumar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Very good one to share.
Good work.
Keep it up.

14Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Tue Jan 24, 2012 5:09 pm

SL.Market

SL.Market
Vice President - Equity Analytics
Vice President - Equity Analytics
@SL.Market wrote:
@sriranga wrote:It's easy to forget the mistakes we make. That's a mistake in itself. Here are five traps to avoid during a bear market.

1. Focusing on our short-term performance
One Fool reader once commented that a long-term, buy-and-hold strategy is a short-term strategy gone wrong. Sometimes that's true, but I think it's fair to say that most investors buy into the market with the aim of making money over years rather than months or weeks.

Indeed, over the next few decades, we're all going to be buying a lot of shares, aren't we? That's why we should be content with prices being low. Remember, it's at the end of the investment life that you get the greatest profits from compounding.

For the same reason, we shouldn't get overly concerned during bear markets. Prices do fall from time to time. Perhaps we'll have some extra cash in that period to invest further in quality shares. Regular investors should like bear markets and shouldn't be too bothered about solid shares under-performing for a while.

2. Becoming enduringly bearish
Who knows when 'the right time' to invest is? Economic indicators are wrong at least as often as they are right, and as mysterious as the Delphic Oracle's mutterings.

Let's say you disagree and want to time the market a little. If it's a rising market then things can quickly look over-priced. Only a madman would get in, wouldn't he? In a falling market, prices could just keep sinking, so you'd be crazy to buy something that's decreasing in value. But now we've reached the bottom and it's climbing again. Or is it? Is this a fake bottom, or a 'dead-cat bounce'? Or a dead-cat's fake bottom? Negativity is insidious, and a bit rude.

If you find yourself constantly negative, you'll worry so much about the right time to invest that you'll miss it by a great margin. The stock market, on average, rises more often than it falls and outperforms other investments (or at least it has historically). On that basis, the best time to invest is always now (or more precisely, as and when you have spare money to invest).

There are extremely rare times when all indicators are overwhelmingly in agreement (including the Delphic Oracle), but in general I don't think we shouldn't worry too much about exactly when we get into the market. It's far more important to ensure you spend most of your time invested and you put in as much money as you can reasonably afford.

3. Believing financial journalists are experts
I'm shooting myself and my colleagues in the feet for you. Hope you appreciate it. Thing is, what sells newspapers is what's happening now, not what's likely to happen to the stock market in 30 years. Papers love to be negative, so in a bear market they're extremely happy.

Journalists are not hired for their moderate views or long-term commitment to improving your wealth. They're hired to sell papers. Anyone who just buys shares and holds them forever isn't going to be all that interested in reading the financial pages on a regular basis, and so journalists don't write for this audience. If they do, the editor deletes the clause 'but...' from the phrase: 'A top economist predicts market crash, but...'
The most successful investors do their own research; they don't rely on papers to make buying or selling decisions.

4. Not spending enough time on your investments
Before you get addicted to buying and selling shares, it's tempting for beginners to just get buying, especially if their friend, mother or local pub landlord says that he's buying this or that share because he can't lose. No one should leap into stock-picking like that.

If you want to invest in a hurry, read up about index trackers and ETFs. Read everything you can on them. Take a look at what people are saying about them on our discussion boards and ask your questions there. It should take you just a few hours a day for a week or two to get comfortable with the idea of them. That's not much effort to lay the foundations of your future financial security.

Once your money is invested relatively safely, you can then take the time to truly learn what on Earth it is you're getting into when you're looking at individual shares. May I suggest you be as cynical about them as you like? Keep digging to find out what's wrong with the company and only then, if you find nothing serious, can you buy. In other words, concentrate on what might go wrong with a share before you consider what might go right. Your wallet will thank you for it.

5. Spending too long on your investments
On the other side, once you've got used to investing it can begin to get you a little too excited. Lots of people check their shares every morning or several times a day.

You know your friend who goes to the gym, and working out is all he talks about? Or how much your other friend talks about just clothes and fashion? You know how boring that is? You know how much you wish they'd just get a life? Well then.

Keep a balance. By not over-doing it, it'll also help you resist the costly temptation to over-trade. But that's going into a sixth mistake, and I just promised you five.
BY
Neil Faulkner
http://www.fool.co.uk/news/investing/investing-strategy/2009/03/26/five-bear-market-mistakes.aspx?source=isesitlnk0000001

If i was fortunately enough to have some powers here... I made sriranga as moderator or some reputed position here. What a nice and valuable post are offered by sriranga.... keep going on your great work for the public interest.

Thanks so much....

I gave my suggestion two months ago... what now has happen?
Now Sriranga is a moderator...
I realized the gems long ago that needs in CSE

Congratulate Sriranga....

15Five Bear Market Mistakes Empty Re: Five Bear Market Mistakes Wed Jan 25, 2012 12:44 am

LateTackle

LateTackle
Senior Equity Analytic
Senior Equity Analytic
Thanks Sriranga excellent article & congratulations on becoming a moderator.

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