🤔As a person passionate about psychology and also an investor📉, I often make comparisons about what human psychology would be like when that case is in investment and I realize a lot of interesting things that I don't know if anyone has analyzed before, but I will talk from your perspective.
👩💻I see a psychological effect that I often have, if anyone has it, please comment to show your feelings to see if it is the same as mine. And the main character today is the psychological effect "Anchoring effect". Why is it called the anchoring effect? This is a psychology that when someone is exposed to a new concept, they will often believe and attach themselves to the first information they receive. It is likened to an "anchor" fixed at one point, if strongly influenced by this psychological effect, it will be very difficult to shake their thoughts and ideas about that concept.
In investing, this psychological effect can easily blind investors when faced with a plethora of data and make it difficult for investors to gather and combine data to have a correct view of the market.
Here are some small examples for everyone of this psychological effect:
When a coin peaks at $100 and goes down, investors buy at $60. After the price goes up to $80, investors can cut to take profit, but because of the anchoring psychological effect, they still hold on to wait for the price of $100 even though the market is showing signs of going down.
Investors often use market indices (industry averages) as a benchmark when evaluating the value of their company's stock without considering the specific situation of the company. Relying solely on general indices sometimes causes investors to misjudge the actual potential.
When investors hear positive forecasts from experts or trusted sources, they may use these forecasts as "anchors," making it difficult for them to change their minds even when information to the contrary is presented.
===> This effect has 2 negative directions >< positive but the positive is less and the negative is more.
Positive at the point? If because of that "anchor" people can profit and get to shore.
Where is the negative? The negative is also written from the above idea. As written above, this may be a good thing, but it only has immediate value, the profit is because of the information received before and luckily when the information does not change and no information is 100% correct, if someone thinks that "there will be some information that is 100% correct" then please allow me to say that "that person is too young in the market". And this effect is almost everyone who is affected without realizing it, both in normal life and in investment psychology.
===> So how to fix it:
-> I often use this method to keep myself in the most objective state: "All information I receive is for reference only, listening to know, selecting information to save, not saving all of it."
-> Analyze the market and filter data information before investing in a category.
-> If there is any other way, I hope everyone will comment so that I and others can learn!
