[Summary]
Locust investing is an investment behavior that focuses on short-term materials.
What is more likely to fail with locust investing is not the lack of knowledge itself, but the fact that you end up justifying your hasty decisions afterwards.
In actual investment, we first check the lifespan of the material and the peak of yield. However, it cannot be overlooked that if you exit late, you will be caught in a steep decline.
In this article, we will organize locust investing not as "knowledge" but as steps to check before buying or selling. Don't rush to conclusions, read according to your financial amount and time horizon.
What to distinguish when investing in locusts
When looking at locust investment, first determine what you want to judge. The information you need will change 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. Locust investment is not the only factor in making 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 locust investing is likely to fail
If you look at locust investment as a failure pattern, first 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 | What to see with locust investment |
|---|---|
| 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
The problem with locust investing is not only when you lack knowledge. In fact, there are situations where we interpret something conveniently because we know a little bit about it.
- Do not decide whether to buy or sell the moment you see a locust investment.
- Do not mix the time frame that suits Locust investment with your own holding period.
- 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 not to decide on just one correct answer, just locust investing. 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
Please check these five things at least before making a decision on locust investment.
- Can you explain in one sentence the purpose of looking at Inago Investment?
- 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 locust investments is not to act faster, but to reduce unnecessary errors in judgment.
Summary
Locust investment is a material for organizing your 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.
- Decide first the purpose of looking at locust investment
- 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 locust investment as a tool to pause before buying or selling, rather than as a word to rush into making a decision.