AndrewChia.com

Source:  The Star, Malaysia
Personal Investing column by Ooi Kok Hwa

Highlights

1.  In the stock market, there are two main types of investors – smart investors and retail investors.

2.  Smart investors make money; retail investors suffer losses most of the time.

3.  As the market saying goes, only one out of 10 investors make money.

4.  Some retail investors believe they can make quick money.  They also believe the stock market is the best way to accumulate wealth fast.

5.  However, due to lack of proper financial training, investing knowledge and intelligence, they always find themselves at the losing end.  When they are excited, the market may be nearing its peak.

6.  When they are suffering losses, they lose patience and start cutting their losses.  The market may be touching bottom, and in fact, that is supposed to be the best time to invest.

7.  A majority of retail investors seldom pay attention to the stock market.  They only start doing so when the newspapers or TV news headlines show that the market is touching a new high.

Driven by greed and the thought of making fast money, they will follow their friends or tips from brokers to invest without paying much attention to the fundamentals of the stocks.

Comments

1.  I am a fan of Ooi Kok Hwa’s investing column.  He offers useful and practical advice as well as guidelines for stock investors, especially those who are new to the stock market.  He explains concepts in a simple and easy-to-understand manner.

2.  In today’s article he explains clearly why 90% of investors lose money.

Learning message:  Emotional control and investing knowledge are essential to success in stock market investment.