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Buying trades as fans and not investments
Started Aug 03 at 3:55 ET (By aloncarmel2k)
I noticed that most of my first movements in stocks were dedicated to buying stocks for companies that i love and support, is buying stocks a psychological issue? at least at first stage? I bought google because i use gmail and apple because im a mac user. and so on. who has done the same?
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Kohalza
Aug 03 at 8:02 ET
You should buy stocks to make a profit, not just because you like this or that company. You should buy based on whether or not you "believe" the share price will go up. I put the word "believe" in quotes because it's shouldn't be a matter of blind belief, but an educated one.
I would suggest however, that you do pick a sector or sectors in which you are interested and knowledgeable and concentrate most of your investments there. I think in the long run you can only do well in the stock market if you trade in areas you are familiar with.
You can start by searching the site for some gurus that hold stocks somewhat similar to yours, who are doing better than you in terms of yield and follow them to improve your portfolio.
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guliamo
Aug 03 at 8:53 ET
That said, I think it makes sense to invest in products you know. Obviously, if you think a company's product is lousy, you won't want to invest. Being an avid user of a brand / product may also give you insight into it's strategy and product line. i'm sure it was iPod customers who got in on the ground floor on 2003 so there is a lot of truth to what Alon is saying.
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aloncarmel2k
Aug 03 at 9:19 ET
i dont agree with your prespective kohalza, having a diverse stock folder is far better then putting all your money in high-tech just because i am familiar with the field. I think buying as a fan or emotional buy is far better then knowledge.
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KanGuru
Aug 05 at 4:38 ET
Letting emotion guide your trades can only lead you to losses in the long run. It really should be a cold unbiased game. Don't get me wrong, you need to have passion for the game, just not for any of the players. Like in a chess game, sometimes you have to sacrifice some of the pieces to win the game. You won't win if your target is keeping all pieces on the board rather than Nailing the other guy's king.
The metaphor is that in the stock market your target should be making a profit, not buying into companies you like just because you like them.