When I was eleven and living in Canada, I used to take the Toronto Subway to the Canadian National Exposition to ride the rides and enjoy the fun midway games. One day I decided to use some money I had earned from mowing lawns to try and win a stuffed animal. One of the concession people showed me how easy it was to throw the baseball into the little bushel basket for the win. It looked so easy when he did it.
After trying unsuccessfully a couple of times I finally hit two in a row and won not just one but two beautiful stuffed fish. In my young entrepreneurial mind I quickly calculated the value of the stuffed animals against the two dollars I had spent winning them. It seemed to me with some new signage on my existing lemonade stand I could quickly convert it to a stuffed animal resale business. My excitement was encouraged by the
Expo worker who assured me I had a real talent for the game and could certainly clean them out if I kept playing.
Let me just say that after spending another five dollars of my own, then borrowing five more from my brother, I went home dejected with my two very expensive fish. I learned then that being greedy could ruin an otherwise good experience.
The two dangerous emotions that often drive the stock market are fear and greed. If investors allows these emotions to take hold they may find themselves selling when things are cheap and buying when they are expensive. It is the curse of the investor that even though our mind often knows what’s best, our emotions can be very powerful.
Clever salesmen can use these emotions against you and encourage you to do things that may not be in your best interest. When greed is present people will make hasty and poorly thought out decisions. Modern technology has made it easy for scammers to bring a plethora of questionable offerings right into our homes.
Criminals have become very good at disguising their online schemes to look innocent and sincere, but one constant remains as a bright red flag. In almost every case, fear or greed are the lures they use to draw people in, but if you pay attention to your feelings it can be quite easy to tell when something just isn’t right. If a person or advertisement is appealing to your greed, or playing on your fears, put up your defenses.
Learn a lesson from my experience at the Canadian Expo. If you find yourself tempted to make a financial decision based on fear or greed, pack up your fish and go home.
Hi, I'm Dan. I'm a CFP® Professional.
Securities and advisory services offered through Commonwealth Financial Network®.
Member www.finra.org / www.sipc.org , a Registered Investment Advisor. Wyson Financial, 1173 S. 250 W. Suite 505, St. George, UT 84770.
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