1.In a volatile stock market, why is it important for investors to assess their reactions to financial risk a
Answer:
Not sure if you finished your whole question or not, but I'm going to take a stab at an answer.
First of all, it's important for investors to know thy self BEFORE investing. One of the biggest mistakes investors make is investing in something that doesn't match with their style. A drastic example is a conservative investor who likes slow moving things suddenly day trading.
That said, if there were investors say in the stock market, counting on blue chip stocks with blue chip returns and the volatility started to increase, there could be a problem.
It's important that investors are aware of how much "pain" (aka volatility) they are willing to stomach during these periods. If they know that they can't handle that volatility, then they should change their investing style BEFORE they get the ulcer. :-)
Not only will doing the gut check ahead of time help with ulcers, but you can sleep better at night too!
Hope that helps!
In my opinion, if you're going to be affected by volatile markets, you have the wrong strategy.
Markets are volatile, that's just their nature.
Why should you suffer from it?
There are so-called market neutral strategies, which can make you money without the worries about volatile markets.
One example is the link below.
Let's make money!
Good luck
Marc
If you don't know how much you can lose, you generally lose more than if you analyze, determine and set your loss ahead of time.
It generally means you've done your homework, and have some idea of what to expect, rather than hoping. It means you've made a rational, logical decision rather than trading on emotion, which is always wrong.
It means you anticipate, rather than react.
You can get some helpful tips from this blog:
http://stockmarketstrategy.blogspot.com.
Hope this helps!
Alicia
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