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Emotions can sabotage investment decisions from "summary" of A Random Walk Down Wall Street by Burton Gordon Malkiel
Investing is a game where emotions can wreak havoc on one's decision-making process. When emotions come into play, rationality often takes a back seat. Greed can lead to chasing after high-flying stocks, while fear can result in panic selling during market downturns. These knee-jerk reactions can have detrimental effects on one's investment portfolio. One common emotional pitfall is the fear of missing out, known as FOMO. This fear can drive investors to jump on the bandwagon of the latest hot stock or trend, without conducting proper research or due diligence. This herd mentality often results in buying high and selling low, the exact opposite of a successful investment strategy. Conversely, fear can also paralyze investors, preventing them from taking necessary risks that could potentially lead to higher returns. Market volatility is a natural p...
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