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Is it risky to jump into an investment just because everyone else is

by aforlan

  • Writing Level Star Writing Level Star

Yes, it is risky. You must realize when everyone else together buy an asset men to the demand is high. The price raise equivalent with the stock demand. The asset must be overvalued and you should provide more money too buy it. If you have not good reason to buy it, you should do not care to others step.

You know the ship wreck soon if the passenger leave the ship at one side. They will jump to the sea at the same side. The one side of ship is full passenger; meanwhile the other side is empty. The ship becomes unbalance. Therefore, that one side of ship will sink first because it force by weight passenger.

It is risky to jump into an investment. Sometimes the speculator blows the issues that a stock will raise over many times. They do like that to fool foolish investor. The fool investor will buy that stock whereas that stock is bad. Perhaps for one week the stock price still rises because other fool investor buys the stock. At the peak of stock price, the speculator suddenly redeems their stock. The speculator will get higher return over many times. After speculator redeems, the stock price soon decrease. The fool investor is late to redeem so they could not get profit and the stock price decrease. Meanwhile the fool investor just regrets. They hope the fool investor will buy their stock. Finally, he realizes there is no one fools man except him/herself.

When Napoleon back to Europe, he prepared to fight with other Europe country. The speculator use this moment to collect profit. They blow issue that the economic rush after Waterloo War. Much fool investor tempted with the speculator issues. They soon redeem their shares so the shares become invaluable. The speculator soon buys their shares too. We know that Lord Wellington has treated Napoleon. So the worthies of economic unproved. The fool's does not notice the economic loose again.

You should control your emotion. Do not ever your emotions to drive you. The roots of all fool's come from greed and fear. You want to collect profit over many times but you do not analyze the investment before.

If everyone else jump to an investment, you should analyze whether the prospect good or not. You could follow others when you sure the investment is profitable and reversely. If you find the rising of stock price is abnormal, you could avoid it.

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