What is the number 1 factor which affects your success in the financial markets, especially the stock market, you might think it is research, studies, theories, etc. Well, in order to generate good returns over a period of time, you do need to possess good skills in all of the above. Still, the most crucial factor in deciding whether you will be a successful investor is Perception.
The good old perception. It is necessary to research, back your company with good reasonings, and have a strong philosophy while investing in it, but more than that it is the perception that will define whether you make money or not
Perception in simple words is the way you look at things, your perspective and point of view on certain things. Specifically, in the stock markets, there are two types of investors. Pessimists and Optimists.
When the market dips or even crashes, the pessimists are the ones who panic sell, are usually in fear, and don’t invest at all but on the other hand, the optimists are the ones who see an opportunity and once-in-a-lifetime opportunity when the market goes down. Consider the pandemic of 2020 as an example, if you are an optimist then you would have surely bought good companies when they were down, and now, sitting on a hoard of profits. But if you are a pessimist, then all you would be having right now is a ton of regret. Am I right?
How you look at the stock market, and your perception changes everything for you. And the past results and performance of the markets prove that it always pays off to be an optimist. It’s not too late to use some experience and wisdom to try to change your perception of investing. It will definitely pay off.