As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

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Wednesday, 3 February 2010

Is The Nature Of Your Salaried Job Holding You Back From Making Money?

Some researches on trading/investing psychology show that the nature of salaried jobs may be responsible for holding back some people from being successful traders or investors. Some jobs require detailed and careful planning and must be executed accurately without any errors e.g. job of a surgeon and pilot. Surgeons and pilots are known to be poor traders.

But, when it comes to the stock market, most of the time, you don't have to be more accurate, more detailed, more safe to make money. Stock market doesn't operate in this nature.

The daily stock price volatility is seldom driven by changes in detailed analysis of a company's intrinsic value.

The stock market is still a market place for buyers and sellers to transact. If the view of the buyers and sellers are strongly oppose to each other, the stock prices are going to be driven crazy in either direction.

The daily stock prices are mainly driven by these groups of people:

Some will speculate.
Some will anticipate.
Some act before news - they are better informed.
Some act after news - they are late for the party.
Some act on rumors.
Some follow blindly.
Some act on sentiments and emotions.
Some are forced to act - by their trading methodology or their brokers

Honestly, how many will act on changes in intrinsic value?

If you are holding a hammer, everything looks like nails. Best to leave your hammer at your workplace and don't ever bring your hammer to your personal investment as you don't need to answer to your bosses.

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