Recently I was reading a book and I came to know about one very common habit or average investors in stock market. I would like to share the same with you. We are going to talk about one common habit of investors in stock market. We think it’s a good habit but in fact it is not. We will call it stock collecting habit. It is really very tough to convince our mind to go against the flow. In this article we are going to force our mind think differently and we will explain why this habit is not a good habit.

Recently I was reading a book and I came to know about one very common habit or average investors in stock market. I would like to share the same with you. We are going to talk about one common habit of investors in stock market. We think it’s a good habit but in fact it is not. We will call it stock collecting habit. It is really very tough to convince our mind to go against the flow. In this article we are going to force our mind think differently and we will explain why this habit is not a good habit.

Big financial brokerage houses love you to have this habit. In fact they call is “investment strategy”!!  I think its total Nonsense. An investor is trained to believe it is a good investment strategy, a smart way to invest, and if you do not see it critically and logically, u will start believing that this “strategy” has served you well in past years. But as per my personal view one should stop continuing this habit as soon as he comes to know about it. Let’s try to understand why?

Let’s talk about recent past. It was year 2007. Whatever you wanted to buy at that time, it was “HOLD” for next few years as per our favourite TV channel analysts, financial guide and stock guru…!! for example: Reliance @ 3000 Rs. hold for long term,(In a year it hit 1000 level..and now in 2009 it is at Rs 2000, still 33% down from “strong hold” view)!! And where are they now?

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“Buy” and “Hold” is a good strategy for Bull Run. I agree. But unfortunately we do not enjoy Bull Run always. In Bull Run we see stock price goes up and up and up, and in such case being stock collector can work for an investor.

Try to understand one thing clearly. I am not against the habit of collecting. There nothing wrong in being collector of anything. You can collect coins, old wine, pictures, books and many other things. It may give you great joy and in future it can remind you old days. But when you collect something, make sure you are not collecting them with a view to sell them in future. In future if the value of your collection is rising, it is OK but it should not be your motive behind collecting the same. You are collector of that particular thing and this reason is enough.