Feelings of anxiety, fear, and uncertainty that accompany investment decisions often lead to financial underperformance. Roadblocks that emanate from personality issues can interfere with successful investing in the stock market. Many people have internalized negative attitudes that make them feel inadequate when it comes to managing their investments. Demystifying and overcoming these personal obstacles, along with acquiring and implementing several well-tested tenets can facilitate a greater degree of success. By gaining greater recognition into self-defeating tendencies and by following a small set of basic principles, investors can expect to generate more positive results.
Investors are prone to protect themselves from the pain of being wrong by pursuing herd behavior, based on the belief that if many other investors are rushing to buy or sell, then it must be the right move. Investing with the herd is psychologically designed as a pathway toward regret avoidance. The anticipation of regret drives the common self-defeating pattern of selling winners too soon and holding on to losers too long or, conversely, to hold winners too long after they had exceeded expectations. When a winning stock pauses in its upturn or retreats while digesting its gains, the average investor often will sell in order to avoid the fear of regret if the stock continues to decline and profits evaporate.Joining us for our discussion on Eliminating Stock Loss Fear is Stanley Teitelbaum , who is in New York New York. Dr. Stanley H. Teitelbaum, PhD is a clinical psychologist and psychoanalyst who for more than thirty-five years has had the opportunity to help clients examine and overcome their emotional problems and interpersonal conflicts. He is the author of Illusion and Disillusionment, which informs many of the themes in Smart Money; Sports Heroes, Fallen Idols; and Athletes Who Indulge Their Dark Side. Teitelbaum has appeared on Good Morning America, Nightline, 20/20, and Court TV, and was a regular guest blogger on Huffington Post. He is the author of Smart Money: A Psyschologist's Guide to Overcomming Self Defeating Patterns in Stock Market Investing . Welcome to Mastering Your Money, Stanley Teitelbaum