Here the odd interview from 2004 about psychology. The year when the theme plays no role, since stock market always repeats itself. Yes, I know. Lame theme, no pictures, no colorful charts and directly with money, it has nothing to do. Actually, as boring as the bone-dry mathematics of money and risk management. 90% shown to lose more money in the stock market than they win. Or to put it exactly once: to lose 84%, provide 14% break even and the remaining 2% deal with this “boring” and “colorless” stuff, like what’s coming now. Few investment decisions are made from a strategic standpoint. Often, investors decide from the gut, in which they invest – without considering the consequences. What role the mind plays in the financial markets, we talked about it with the market analysts, financial advisers and author Franz-Josef Buskamp. Mr. Buskamp the importance of the psyche of the investor in the stock market? Buskamp: The psyche affects the bulk of the investment behavior. Fears, desires, hopes, worries, etc. are almost always the companion of an emotional investment. This may be so pronounced that affect the emotions on both the positive and negative side börsenbezogene investments almost 100%. Why do investors always make the same mistakes? Buskamp: The typical system failure is derived primarily from personal conditioning. Take for example the counter-cyclical investment. In addition, the majority of investors are not really capable of. Invest counter-cyclically indeed mean strictly against an existing trend to invest. With such a complex behavior, I present myself against the majority of investors and disassociate myself from the current development. This means, in practice, I stand with my views on the market, largely alone, and since then has also to answer for it. Precisely this is not mastered by most investors, because it simply is a lack of personal circumstances. I’m simplifying this is to a point: Anyone who respects the fact that there may be other, as neighbors, for example, tell their own decisions and behaviors that do nothing else in the market, as based on mass behavior. And lose it? Buskamp: Yeah. With the focus on the mass of uncertain investors will react too late. Too late to get in, sell it too late, because the collective march towards represents for him a focus. And yet, many investors believe the actions of the masses. Has the mass simply because of their purchasing power is not always right? Buskamp: Setting Up the mass psychological phenomena always takes a long time. Thus, a collective consensus on a market will not be made within a short time. These multiple interactions and chain reactions are required, are affected by the different investor groups. Who buys what, so we buy it too. For example, then it guided investment banks set the specific sectors on their shopping lists. Eventually, the masses jump on these financial media-moving train, etc. Therefore, trends never lived. Since the mass, as such, but in the long wrong, are collectively end up with certain investment losses. But it requires the mass to longer-term trends in place at all to very. . . Buskamp: A mass initiating any new trend. Longer-term trends going back to their origin only to a few market players. It is not called that the number of shareholders at the peak of a bear market at its lowest, is at the peak of the boom, but the greatest. The crowd takes over until the other, a trend later in the regiment. This is usually the stage, shaking in the cold, calculating actors on equity valuations head. The mass effect is therefore be greatest when it flows into an overvaluation or undervaluation of a market or sector. This mispricing is then later corrected. So the crowd is wrong. AnzeigeSEB term money: You put your money back until the self-imposed deadline, how does the mass of investors up to date? If it returns any clues to the future market? Buskamp: The mass is currently dominated by fear. Fear of the future, against terrorism, before the political developments before the next bear market share. But the latter prevents precisely this development. The stock market audience is very receptive to negative forecasts unchanged. Who is currently on a crash, will only make more losses. The fears also prevent other great Marktaufschwünge, so we are in the equity markets in large moored sideways, which still can run years. To dispel the fears of the masses, it would require a stronger trust. A confidence-building process is not observed at present. It is therefore a matter currently focusing on sectors that are running and that is really beside valuebezogenen Investments commodities and metals, while the cyclical and sometimes not very small fluctuations are taken into account. How should investors behave in your opinion, if he has retracted shortly after the purchase of a share massive paper losses and how this scenario is also influenced him in his everyday life? Buskamp: If a stock has already been shortly after buying massive paper losses, it is already something went wrong in the run. An investor can, for example, protected by a stop-loss order in front of rapid and massive losses. It sets before you buy a stock it quite clear from what he sells size loss again. This is the only realistic way of not allowing a loss of developing easy to run. Or he buys into a market sector that is already on the ground a long time, and takes further losses easily accepted. When potential losses are part of the strategy, he will have no problems with it. In practice, behaves, but rarely that is reflected not only on losses. Downside risks are simply ignored. Then, however, the emotions rise in parallel with the loss development. With each new low, the pressure increases, until it becomes unbearable. The price movement dominated the thinking in these phases, and hence the life of the investor, depending on how strong he is financially involved. This then goes sometimes until exiting completely unnerved investors in investment return. He would just come just to rest and save the rest of his money. With the original investment plans, this has everything to do anything anymore. There are only responses from the mental condition of the investor. Between how many investor types differ? Can be found in your book, “Mental competency Exchange” each investor again? Buskamp: I distinguish between 8 types of investors. Every investor should find themselves in a typology that fits its current situation. The situation is indeed not the case that an investor might remain mandatory in a once-established typing. Thus, there are of course mixed types or instances where investors always fall back into their original patterns. Another issue is, however, whether an investor is able to admit to the moment of recognition, and also work on it. If for example, he acknowledges that he is an involuntary long-term investor. There is no use to say, yes, because I recognize myself again. The change will come only when it begins actively to set apart and its deficits will change gradually. The investor can achieve higher profits by rationality? Buskamp: When compared to the emotion certainly is. But I can not only reduce this aspect. This would mean meeting only with the understanding traceable decisions. So the stock market does indeed now not at all. Those who act thus, the counter-cyclical assets quickly turned into loss-makers, for example, because it is too early to trends. Or he tried on the basis of logic to operate profitably, which is not available. The aim is to understand the mass to consider, could this or that over the next few years will be a topic for the masses? How could influence the time factor in the stock market? Buskamp: Most investors do not have time and also take no time. Everyone wants to win as quickly as possible. I experience this in my daily work repeatedly. No one shares rises immediately after a recommendation and then within a few weeks at most 100%, be the first investors already nervous. It does not work, the impatience of the markets is a bad partner. Impatience out wrong investment decisions are taken or taken too early gains. What stock I can quickly bring the super-profits? Anyone who approaches the market is already on the path of the loser. It can even sometimes last for years to offer great investment opportunities, such as in the period from 2000 to 2001 in the precious metals sector. At the time when you could not go far wrong. Since we had such a great opportunity. And have access to investors? No, they turned downright dumb. Gold shares? What rubbish. Earlier this year, when the gold bugs index had increased sevenfold, piled up the typical question: Which gold stocks you can still buy? This shows, inter alia, is relatively cheap as the time factor. Those who had in 2001 Patience, who bought gold stocks. The impatient, however wanted to go to a sevenfold increase of the index in early 2004 to buy right at medium high, ie two to three years later. But a few years earlier they did not have enough patience to reinzugehen in the sector. So you see how the time factor is so absurd. Through which investment objective must be your opinion, the normal retail investors be most clear? Buskamp: He should have clarity about what he wants to achieve with his investments and do not lose sight of that goal. This goal, he should be able to outline very clearly. Not only the banal “I want to be rich”. What does he want with that money? Buy a house? A great car? Expensive art? Or perhaps achieve financial independence? Then he should formulate concrete, such as “My purse achievements are to put myself in the position to buy a nice house” or “I want success in the stock market in order to be financially independent.” That’s a nice goal. This aim he must runterbeten not every day mantra, because that does not work, but really internalize that lead again and again before our eyes. For as a clear goal-motivated and can protect against stupidity. The investor takes his money simply by careful, if he has a clear goal and this brings with his experience in law. He only has to be aware that he can not force his goal. He ordered the ground, so to speak, giving the financial growth but also time. What advice can you give private investors on psychology in the stock market along the way? Buskamp: Spontaneous, I recommend reading my book, “Mental competency Exchange. But not only read but also to work with them. I have written this book to investors, regardless of whether private or institutional investors to offer in terms of psychological support. And as I have experienced in recent years, it has already helped many investors to restructure their trading activities – and very successfully. Source: Press and Public Relations, Financial Book Publisher
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