Who is The Worst Enemy of Investors?

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DO investors have any common worst enemy? Whether it is as institutional or an individual, whenever investments not made properly but landed to huge failures due to various reasons, an investor himself or herself turns as the worst enemy of them. Yes, an investor is the proven worst enemy of self than anyone or anything else in the world. Here is the solid reasons why I said this.

Individual or institutional investors generally make big mistakes when they do long-term investments without proper understanding of real business fundamentals. When they make decisions based on emotions or market fads, they convert themselves as their worst enemy.

When temporary price fluctuation become dominant focus to make any investment decision, as investor falls self to the pit of losses. If such decisions particularly focused only for short-time gains, the penetration of lose would be huge. Major or total capital erosion is the result of such decisions. Any emotion based investments by any investor to make fast money leading by greed turns himself as his worst enemy.

How greed drag investors to the center of grief? When prices are rising, most of them feel that is an opportunity to make huge money immediately from present market trends. Due to lack of self discipline, they bypass the most required decision making factor, considering the business fundamentals. Such substantial high-risk bets would later put them to huge troubles like to become bankrupt. There are thousands of investors (they are not investors but day traders) destroyed in this way, around the world and still it is happening!

Another end of the emotional spectrum, the worst enemy of investor, is fear. When prices are falling, fear of lose causes investors to focus solely on the possibility of continued price declines to the exclusion of investment fundamentals.

And finally, using mathematical equations and computer programs gives investors super confidence to get huge gains from stock market. Unfortunately they don’t know such equations or computer programs never able to capture investment success in anyway.

Whenever any investor enters to the stock market with unsophisticated and undisciplined mind and adopting dangerous investment strategies that primarily oriented towards returns, how much they can make, and pay little attention of associated risks, there is none in the world but he/or she self turns as his or her worst enemy!