FINANCE

PSYCHOLOGY OF INVESTMENT

Modern economics believe that investors are always rational when making investment decision.

However irrational decision has been seen in the investment decision made by individuals. The impact of emotion in investment decision cannot be over emphasized. Emotional factors such as greed, pride, advert ,love and other affects investment.

Many mistake made by investors is due to emotional factor being overridden by reality.

Having control over one’s emotion can reduce the impact of emotion over investment decision. Risk management strategy , investment plan, investment rebalancing and proper mental health can reduce the impact of emotion in investment decision .

RISK MANAGEMENT STRATEGY.

You can specify risk factor to guide your organization. Some example are as follows

1.OUR LOSS CAPACITY IS 20% OF OUR CAPITAL.

2. DO NOT INVEST MORE THAN 15% OF CASH BALANCE IN THE YEAR.

3.WE CAN ONLY INVEST 10% OF OUR CAPITAL IN A RISKY PROJECT BUT GOOD CHANCE OF HIGH RETURN.

 TAX PLANNING AND INVESTMENT STRATEGY-EBOOK

ACCOUNTING SOFTWARE

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