Greed interferes in the world of investments

Rational investing and realistic expectation of returns are often lost when one wanted quick gains. Impatience is a common attribute of some investors and this can curtail higher returns or it can result in huge losses.


I heard of people spending weekends searching for properties which may have en-bloc potential and are willing to spend million of dollars to acquire them. You also get marketing flyers in your mail box that suggest that certain properties have en-bloc potential. Newspapers also reported on property speculators who buy newly launched properties in the hope of “flipping” them to earn on the price differentials (known as sub-sales). This was rampant at the height of the property frenzy. This has somewhat fizzled out after the global financial markets had taken a beating.


Greed causes a person to take irrational risk hugely out of proportion to the returns. Not everyone has a good story to tell on how well they have done. The sad stories are never reported.


If one has sold shares at a reasonable gain, it best not to look back at the decision and regret that you have released them too early and missed out on a higher price. It is wise to be contented if you are in the black and not let greed rules your investment decisions.


Written on 8/26/2007 9:00 PM


Copyright © 2007, the author known as LKT in Singapore.


The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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