[Summary]
Investment addiction is a condition in which one becomes dependent on the stimulus of buying and selling.
What makes investing addicts more likely to fail is not the lack of knowledge itself, but the fact that they end up justifying their hasty decisions afterwards.
In actual investing, the first step is to record the number of transactions and investment results. However, we cannot overlook the fact that it can easily affect your living expenses and sleep.
In this article, we will organize investment addiction 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.
First thing to know about investment addiction
When looking at investment addiction, 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. Investing addiction 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.
Scenes where investing addiction is likely to lead to failure
If you look at investment addiction as a pattern of failure, 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.
Checking the following points will make things a lot easier.
| Axis to check | Things to see on Investment Addiction |
|---|---|
| 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
Investing addiction doesn't only stumble when you lack knowledge. In fact, there are situations where we interpret something conveniently because we know a little bit about it.
- Don't decide to buy or sell the moment you see investment addiction.
- Don’t mix your own holding period with a time frame that suits your investment addiction.
- 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 settle on one correct answer just because you are addicted to 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
Before making your investment addiction into a real decision, check at least these 5 things.
- Can you explain in one sentence the purpose of watching Investment Addiction?
- 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 investment addiction is not to act faster, but to reduce unnecessary errors in judgment.
Summary
Investing addiction is a resource 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 the purpose of watching investment addiction 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 investment addiction as a tool to pause before buying or selling, rather than a word that forces you to make a hasty decision.