When any investor takes investment decision, he should study these 3 top theories of investment. These theories are so practical and will be helpful for doing perfect investment decision.
1. Back Theory
As per this theory, when there is the trend of increasing the price of security, there will decreasing trend after rising. This is called back theory. If prices is increased by 30% of any financial product, there is chance of decreasing its prices 10%. We can see same in the Gold prices in Indian market. After continuing increasing prices, Gold prices suddenly has decreased. Now, again it is increasing. So, investor should take the lesson from this theory. He should remember that after increasing faster, prices will decrease small.
2. Fool Theory
Fool theory is the investment theory. As per this theory, all investors are not so rational. They also do mistake. So, if you buy at higher price. Forget it because you can sell it also at higher price and gain some profit from it because there will be some fool in the market who will buy like you. This theory will also reduce your stress. Every over-smart investor will become fool and will surely buy your financial product at higher price from you.
3. Loss Dislike Theory
More than 90% accepts this theory. As per this theory, investor dislikes the loss. When any investor sees the loss in any investment proposal, he will leave the proposal because there is the chance of loss. Only 10% investors take the challenge and get good reward for suffering this risk. Now, it is only you, you will be count in 90% category or 10% category of brave investor.
Related : What is Holding Period?
1. Back Theory
As per this theory, when there is the trend of increasing the price of security, there will decreasing trend after rising. This is called back theory. If prices is increased by 30% of any financial product, there is chance of decreasing its prices 10%. We can see same in the Gold prices in Indian market. After continuing increasing prices, Gold prices suddenly has decreased. Now, again it is increasing. So, investor should take the lesson from this theory. He should remember that after increasing faster, prices will decrease small.
2. Fool Theory
Fool theory is the investment theory. As per this theory, all investors are not so rational. They also do mistake. So, if you buy at higher price. Forget it because you can sell it also at higher price and gain some profit from it because there will be some fool in the market who will buy like you. This theory will also reduce your stress. Every over-smart investor will become fool and will surely buy your financial product at higher price from you.
3. Loss Dislike Theory
More than 90% accepts this theory. As per this theory, investor dislikes the loss. When any investor sees the loss in any investment proposal, he will leave the proposal because there is the chance of loss. Only 10% investors take the challenge and get good reward for suffering this risk. Now, it is only you, you will be count in 90% category or 10% category of brave investor.
Related : What is Holding Period?
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