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Eight deadly sins of investing in stock market
- Anchoring: Instead of adaption to a changing market, one continues to focus on past events.
- Herding: Do not simply do what others are doing. Else you will end up buying high and selling low.
- Loss aversion: This is also called panic selling. Do not ever sell in panic of loss. Make an informed and wise decision.
- Lack of diversification: Never put all your eggs in one basket.
- Optimism: Be practical, not emotional.
- Mental Accounting: To justify success, one tends to separate the performance of different investments.
- Narrow framing: Always take decision based on the impact on your total portfolio.
- Regret of failure: Due to regret of failure in in the past, once doesn’t take necessary action.