I often wonder why it is people buy stocks at the point where everyone is hyping them up and explaining how they are 'a sure thing' then subsequently start to become nervous as the share price eventually falls during a market down period. In a really bad downturn such as the credit crisis some stock prices fell dramatically they can drop substantially and when they finally hit rock bottom the investor will then sell out.
Now let's think this through logically as an investment a stock should be considered volatile, it will have both its ups and downs but history has shown us that in time over the long term stocks have shown the most growth and best returns.
Develop the right mindset about why you are investing, if it is to double your money quick smart you are better off choosing black or red at the casino. Stock markets can return these figures but it is fraught with danger unless you are extremely sure of what you are doing.
Change your approach to the long term, how much can this earn me over the course of my life, whether it goes up or down it will still pay dividends and in all likelihood go up over the long term.
Investors tend to invest at the time when market sentiment is good and everything is rosy and the outlook looks fantastic. This tends to be at the higher end of the rollercoaster and it's at times where nervous people sell off good solid stocks when the opportunity presents itself not when the outlook is good.
The credit crisis is a perfect example of where some good solid companies have been sold off to very high levels based around similar companies falling over. Stock prices plummeted in just about every sector and every part of the world and it also gave savvy investors the chance to get in cheaply in some stocks they thought might not drop to those levels again.
Remember for every buyer there is a seller and try to think through the chaos of the tv and newspapers and recognize where good opportunities present themselves.
http://www.passive-income-success.com/wealth-creation-strategy.html
Author's Bio
My name is Stuart and I am 25 years old living in Melbourne. Australia. Since I was fairly young I have always had a thing for numbers, money, investments you name it and well basically it still is a passion of mine. In fact I remember wanting to buy a few stocks with some pocket money I had once. I guess that is kind of cute but sad at the same time!
Unfortunately I cannot brag about all the millions I have made because the reality is I haven't made any yet!
When I was 21 I purchased my first investment property and I also have purchased high yielding stocks and have attempted numerous online business and money making opportunities and affiliate programs on the internet with varying degrees of success. I have a passion for investing and passive income please visit my site for more information
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