Every investor needs to learn & understand the behavior finance.
It’s seriously one of the major lacking attribute I see amongst many investors.
Some examples of why understanding of behavioural finance is needed:
1) People get high when a stock is rising & get scared when it’s down.
2) People panic buy the way up.
3) Panic sell the way down.
4) Following the herd & what’s hot irrespective of valuations.
5) Getting impatient with stock prices not rising fast or in many case, why stock is not rising daily.
A person who have understood behavioural finance will never make these amateur mistakes.
Psychology plays an important role in stock market. The better you understand it, the more edge you’ll have as an investor in making big money.
