THE CURIOUS CASE OF INVESTORS BEING BITTEN BY THE ‘SHORT TERMISM’ BUG! :
This short story gives a glimpse of the far-reaching consequences of a shift in an investor’s behavior: from a long-term perspective to a short-term perspective.
While it is completely natural to feel the urge to book profits after a stupendous run in the stock’s price, it is wiser to first reassess your rationale for the particular investment. If the fundamentals and prospects continue to improve, it may be better to hold onto your investment. It is also important to understand that the ‘intrinsic value’ is a moving range of prices, hence, what may have been expensive yesterday could be at value today and vice-versa!
Thus, as an investor, one of the greatest skills to inculcate is to ‘continue to hold through periods of market exuberance and market gloom’! This is the only way to let compounding run wild and to avoid being bitten by the ‘Short Termism’ bug!
In case you missed my previous articles in this series on Psychology and Finance, head over to https://aalokbhatawadekar.in/category/reflections-of-thoughts/ !
I made the visual content using ‘PiktoChart’ (https://piktochart.com/). As someone without any real visual content creation knowledge, I found their tools to be incredibly easy-to-use and highly intuitive! This is not a promotion, it is just my personal opinion!