There is a famous saying in English

“I could calculate the motions of the heavenly bodies, but not the madness of the people”

This was said by the famous scientist Issac Newton. Everyone knew that he is a very knowledgeable person.

But why he has to say this about people?
What is the relation between the words and stock market?
Let’s see…

Newton had invested in a well-known company South sea at England. He has made a 100% profit from that investment. Months after he saw that the share went up very high. Immediately he made a huge investment into it. Which went on a very high loss. That made him utter the above saying. From that point onwards he hate anyone telling ‘South Sea’ for his entire life.

But on the other side the stock again grew up tremendously. The thing is he wasn’t interested and got shocked and stucked with the loss which made him not to invest in stock markets thereafter.

Now let us come to the answer for the question. Obviously NO!!!
Investors don’t want to be strong technically. Investors has to be keen about their reason, expectation and timing of investments.

Alpha,Beta and Standard Deviation have nothing to do with investments. The only thing matters is patience.

Sensex has an average return of 16% but churning investor’s average return is only 7%. This clears the point that running behind market will not be a good choice. Waiting will yield the expected result.

To be an investor you have to know only the needs(goals), time period and expected return . If you are clear on that you can make a very clear decision. The real thing matters is patience and emotional control over the investments.

– Thiru

Happy Investing!