investophobia

Hello friends, hope all of you are fine by the  grace of god.  If you want to get more knowledge about stock market and it’s theory, then please follow my website. So today we are going to talk  about a theory called loss aversion theory. This is the basic  thumb rule in the stock market which people forget to follow. By seeing this word it  may seems to you that it is too difficult to understand but trust me that this word is not that much difficult as it seems. This is the fault of these so called financial analyst who has used these kind of words which has very simple meaning.

Whenever stock market goes down, people fears alot and they get too much worry by seeing the continuous  downtrend in the stock market and  people afraid to the loss of their money they have invested in share market and that is the definition of  loss aversion theory.  During this time alot of brokers or financial analyst will come and try their best to create panic especially among the retail investors who wants to earn something from the market. If you actually want to stay away from this theory and i suggest you to stay away from those people who wants to create panic in the market especially financial analyst. Because  during the bull run(when the market goes up), they will tell you to purchase the shares of your favourite company and when market goes down they will tell you to sell all of your shares.

After  stay away from these people, second thing i want to suggest you that invest your money more, whenever the market is in bear run( when the market goes down on continue basis) and this is the only way you can solve this kind of problem. I know that it is very easy to write but trust me guys when i entered into the market during 2020(the era of COVID 19),  i also felt the same. I tried my best to sell all of my shares which i did and now  I feel pity about it so i am trying my best to make people understand to not  to be afraid when the market is in the bear run. If you don’t want to invest more money in the market, then also you can hold the shares of your favourite company but never ever sell those shares during this time and control your emotions and if you have some money in your bank account and if you think that it has no use, then instead of keeping it inthe bank atleast try to invest in your favourite shares.

According to Warren buffet,  be fearful when others are greedy and be greedy when others are fearful. It means that when market is going down people will be nervous, but you have to control your emotions and invest more money(as per your requirement) and when  the market is going up, people prefer to invest their money in market and become more greedy but you have to be fearful . It means that  you should not be greedy and not to invest in the market. In this time you have to analyse your favourite shares of your share. But i did the opposite. So i want to inform you to not to repeat the same mistake which i did and stay invested in the market as long as you can.

Happy investing