Wealth Strategy: Why Unemotional Investing Pays?

The recent market slide and the tech-wreck has left me wondering – Why do so many investors (and fund managers too) repeat the same mistakes time and again? After listening to many of the regret stories, the reason was not difficult to decode – almost every investor allowed his emotions to precede his decision-making. And every story has identical theme -- investors becoming over confident and unrealistic with their expectations. I have been following the day to day gyrations of the market to gain understanding of market trends and behaviours. The more I observe the more convinced I am, of the utter irrationality of many of these spasms. Few days ago, every sector of the market gained 1-2% in a single day. The next day, everyone was worried about the interest rates again, erasing the previous day's gains. How can the picture change so much on a day to day basis? What other factors are at work here? Are stock traders r

This article was originally published on October 19, 2001.