Read? Investing Made Simple by Uncle8888 (23)
Emotional tolerance for Risk/Reward
In life, we will develop good and bad personal and social habits. We will try to keep good habits and reduce bad habits as far as we could. Similarly, in investing we will develop investing habits. Some investing habits that we have developed may actually hinder us from achieving our long-term investing goals.
Our investing habits are likely to be shaped by our emotional tolerance for Risk/Reward and our pain threshold for sitting through paper losses. It is harder to judge whether such investing habits are good or bad as they are often quite subjective and personal.
So it is up to every individual investor to seriously think about it; honestly examine and evaluate themselves. They can measure and benchmark their investment performance to others in their close investment community to do sanity check and ask themselves. Are these investing habits ......
