THINKING OUT LOUD

How do amateur investors act compared to professionals

Here is my generalisation thought of the day.

The main differences that I see between the Mum & Dad retail investor and the professional investor is;

the retail investor;

– “jumps at shadows” to whatever is scaring them in the media,

– they don’t do enough, if any work or research on their investments,

– they are their own worst enemy by entering and exiting investments at the wrong possible time,

– they don’t understand or know how to manage risk – they treat the stockmarket like a casino, and,

– they confuse investing with gambling.

Investing involves researching and understanding the business or asset, analysing its figures, determining its valuation and allow for time.

Time to wait for a bargain AND time to allow the investment to mature.