1, overconfidence overconfidence means that it is difficult for people to evaluate themselves correctly, often exaggerating their abilities, and it is easier to overestimate themselves in the accuracy and correctness of cognition. You think you are a king, but in fact you are bronze.
Moderate self-confidence is a good thing, but overconfidence may become a weakness of human nature. Overconfidence in investment is likely to bring a lot of harm, such as incomplete cognition, overestimation of investment value, obstinacy and neglect of risk control.
In the investment process of specific stocks and funds, overconfidence often leads to the consequences of ignoring risk control. For example, in the middle of 2020, for a period of time, we were overconfident in semiconductor industry funds, and for a period of time, we were overconfident in medical theme funds? More interestingly, these overconfidence occurred when the related funds continued to rise and the rate of return was extremely high, which coincided with the stage of investors' blind herd behavior. Under the above background, investors who buy funds on the market often only see the short-term benefits of funds, completely ignoring risk control and showing gambling-style operation.
When investing, in order to reduce the harm of overconfidence to us, we should keep awe of the market, maintain an open and compatible investment mentality, and persist in in in-depth research and continuous understanding of investment.
2. Herd psychology, also known as herd effect, refers to the psychology of being trapped by emotions without thinking and unconsciously taking some concerted action. There are many manifestations of herd mentality in investment. From a larger perspective, it is a typical herding behavior to plunge into the flock in a bull market and disperse in a bear market.
From the perspective of fund investment, chasing short-term top-ranked funds is also a herd behavior. This kind of psychology gives us more sense of security, and being an independent alien will always make people feel psychological pressure. Under the influence of collective emotions, investors can easily blindly follow the trend, be caught by various hot spots that change from time to time in the investment process, and be infected by the public or fanatical or depressed emotions. Over time, I lost the ability of independent thinking and rational judgment.
The typical performance of herd mentality in stock and fund investment is chasing up and killing down. It is not difficult to explain why only a few people can make money in the market.
3. Regret and disgust Have you ever had such an experience in the process of fund investment? Looking back, I regret that I didn't buy Daniuji; Looking back at the market, why didn't you sell at a high point? Even investors who don't make mistakes sometimes lament that they failed to make better fund investment choices in comparison. Regret aversion has many hazards, and understanding regret itself can help us reduce the occurrence of regret. After all, we can try to be the masters of our emotions.
Regret aversion will seriously interfere with investors' investment, and regret aversion will lead to a series of investment psychological misunderstandings. Investors regret not buying funds at low prices. Even if the future will usher in a critical period of investment opportunities due to market adjustment, they will choose to continue to flee because of such regret and disgust.