[Summary]
There is a saying that resting on the market is an investment decision, and doing nothing is also an investment decision.
What makes you more likely to fail in the market is not the lack of knowledge itself, but the fact that you end up justifying your hasty decisions afterwards.
In actual investment, the first step is to maintain the cash ratio when the market is unfavorable or when there is little material for making decisions. However, we cannot overlook the fact that it is easy to feel that it is an opportunity loss if you do not constantly buy and sell.
In this article, we will organize the market price not as "knowledge" but as a procedure to check before buying or selling. Don't rush to conclusions, read according to your financial amount and time horizon.
Even if you take a break, first divide it by market price.
When looking at the rest market, first decide what you want to judge. The information you need changes depending on whether you want to know the meaning, confirm before buying or selling, or review your current holdings.
Especially for beginners in investing, the easier the words are, the more they tend to take them as a conclusion. Holidays and market prices are not the only factors that can be used to make a decision. If you want to check it, it is more realistic to look at it in conjunction with fund management, holding period, and opposing materials.
Situations where you can easily fail in the market even if you take a break
If you look at the market even though it is a failure pattern, first of all, make a narrow premise. It is important not to mix up whether you are talking about the market as a whole, individual stocks, NISA or long-term funds.
If you check the following points, things will be much more organized.
| Axis to check | Even if you take a break, look at the market price. |
|---|---|
| purpose | What do you use to judge? |
| Time axis | Which is closer to short-term trading, long-term holding, or NISA? |
| basis | Which one is more important: price, business performance, interest rates, exchange rates, or psychology? |
| risk | When things go the other way, where should you look again? |
| action | Will it lead to buying, selling, or doing nothing? |
Points that can easily cause trouble in making decisions
Even if you take a break, you may have trouble with the market not only when you lack knowledge. In fact, there are situations where we interpret something conveniently because we know a little bit about it.
- Even though I rest, I don't decide whether to buy or sell the moment I look at the market price.
- Don't mix up your own holding period with the time frame that suits the market even if you take a break.
- Don't increase your position to recoup your losses
- Don't make a decision just based on SNS or rankings.
The important thing here is to not settle on one correct answer based solely on the market price. In investment, the meaning of the same material changes depending on the market, holding period, and amount of funds. When in doubt, prioritize confirmation over conclusion.
Checklist before buying and selling
Before using the market price as a basis for making an actual decision, check at least these five things.
- Can you explain in one sentence the purpose of watching the market even though you are resting?
- Have you confirmed one or more countermeasures or failure conditions?
- Are you investing your living funds or money that will be used soon?
- Have you decided in advance the criteria for cutting losses, taking profits, and continuing to hold stocks?
- Are you making judgments based only on social media or short headlines?
Checklists are simple, but they prevent you from adding reasons after making a decision. The purpose of checking market prices is not to act faster, but to reduce unnecessary mistakes in judgment.
Summary
Market prices are a useful material for organizing investment decisions. Even if you read it as a failure pattern, treating it as a standalone buy/sell signal will lead to poor judgment.
The points to keep in mind are as follows.
- Even if you take a break, decide on the purpose of watching the market first.
- Do not mix time axis and amount of funds
- Check not only good materials but also negative materials
- When using NISA and long-term funds, consider how to handle losses
- When in doubt, reduce your position or postpone it.
The more knowledge you have, the safer it seems, but in the market it can become dangerous if you use it incorrectly. It is realistic to treat the market price as a tool to pause before buying or selling, rather than a word that forces you to make hasty decisions.