As a Distributor, I have experienced that generally investors have a herd mentality of replicating investment style of their friends, acquaintances and colleagues .Rather planning it based on their own fundamental research and logically compiling data with with their wealth managers, they go by what others do.
Equity markets are challenging and having a heard mentality makes it even more challenging. It’s been seen that investment in an equity market is a sentimental affair, wherein people try to invest more when markets are bullish (when market moves up) and tend to pull out when the markets are bearish (when the market is moving down).Being human, Investors sentiments during the bear phase is so low that they tend to forget the basics of the equity market and are reluctant to invest in the opportunistic market.
When in equity market , opportunities strikes when the market is low and ironically investors don’t capitalize on that scenario. Basically, investors tend to lose patience on holding money and are reluctant/afraid of investing during bear phase of the market.
Contrary, When markets are bullish, investors push their distributors to invest money in equity and mutual funds. This kind of over-optimism is not the right strategy.
How does the market dodge investors in the entire cycle of the bull & bear phase?
Considering the above scenario, investor ends up making huge losses, resulting in absolutely disappointing figures.
Nothing goes right if you follow a herd mentality in the equity market. Hence,
HIRE A RIGHT DISTRIBUTOR TO GUIDE YOU RIGHT!!
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