The Feel Good Factor - The Stock Market Wisdom

Why do people lose money in a stock market rally?

Simple, during a stock market rally, people will follow tips to make fast money.

Usually tips given are of "syndicate" type not the "good company" or "cheap stock (low PE)" type.

These "syndicate" type stocks are expensive.

You bought expensive stocks and you expect to make money? Sure experienced traders can make big money from such rally. Syndicates need to reward some to lure more. Just like the first prize of a lucky draw. If the prize is lucrative, there will be more people participating. More participation means more sales. More sales mean more income for the organizer.

For me, the feel good factor is very important. Even if you lose money, you need to feel good. Even you make a mistake, you need to feel good. What's the point of investment? To feel good. What's the purpose of making a lots of money? To feel good. If you feel bad after making mistakes or missing a boat, you defeat the whole purpose of investment: to feel good. Even if you feel good at the end of a big profit, you cannot compensate the bad feeling you had in the past. You conflict with your own purpose and you will repeat the same mistake in other area in your life, not just in stock market.

Therefore, the feel good factor is very important in investment in stock market. Even if you make a stupid mistake, try to think that you have tried your very best to invest, to a brighter future. Learn from the mistake and really accept your mistake, you will get more mature in stock market and you will finally understand why 90% of the people lose money in stock market and you will feel very good conquering yourself and uncovering the stock market myth.