There are 6 types of investors in Stock Market.
First Type of investors is overenthusiastic. If someone says something, they get excited and purchase or sale shares in fits of whims and fancies. They are looking for Free Tips or Non-Professional advises, Self-Intuition and takes uninformed decisions.
Second types of investors are over wealthy. But merely wealth is not the key to success in the share market. Right? In fact, proper investments by the wealthy can yield excellent dividends. But unfortunately, these investors start investing lump-sum money during every market rise or withdrawing money at
the falling market ey completely lack Strategy & Conviction.
The 3rd types of investors are speculators. They love words like insider trading, circular trading, price rigging or manipulations. Many a times they do things by breaking laws, totally impractical and wholly immoral things. Such speculators and manipulators get destroyed during the steep fall in share market.
4th investors have no knowledge of the market. They always make moves by asking other people. They follow the advice of relatives and friends. They generally suffer from the wrongful and impractical acts of friends and relatives creating chaos and confusion.
5th investors are overall smart. But get drawn towards the speculators and fly by night wealth creators. They don’t have goodwill or the investing capacity of their own. They speculate by using margin trading money or through credits.
The 6th one is sensitive types of investors. These investors can grasp the rules of the market. But they get confused with specific types of shares. These investors fall in love with their portfolio and hesitate to sell even on the limited loss. They literally ‘marry’ their shares. Their loss keeps on accumulating. They simply ignore the cardinal rules of the market and destroy their own wealth.
Let’s see how this relates to a story “The Blind Men and the Elephant”, on a fable that was told in India many years ago. Once upon a time, there lived six blind men. Each of them was very wise. One day these six wise blind men went for a walk in the park. That day, an elephant was also walking in that park. People shouted – “Go away. This is an elephant”. But till now the blind men only heard about the elephant. They became curious and wanted to know more about it. And they began to touch its body the first blind man touched the elephant’s Side, said –“It’s like a wall!” The second one holding the tail said – “It’s like a rope!” The third one touches the Knee – It’s like a Tree!. The fourth one touches the ears said, ‘Nope. It’s like a fan!’ The fifth one touches the tusk. He said, ‘No No, it’s like a spear!’ And the sixth one touches the trunk said, ‘Shut up you fellas! The elephant is like a snake’. None of them called an Elephant an Elephant. Do you know why? Because their perceptions lead to misinterpretation. They all describe the elephant differently, just on the basis of the part of the elephant they touched. Let’s see how this relates to stock markets and investors. Consider the Stock Market is like a giant elephant. And here there are 6 types of investors as 6 blind men.
All the above investor’s attitudes and perception towards the stock market are different but the ideal investor is patient, calm and shrewd. He purchases only fundamentally strong Stocks. And hence he is always stressing free. Such investors are silent and successful. Investors should not forget their long-term goal. Markets may go up and down every day! The index movements should not alter your goal to retire comfortably in the next 15-20 years.