Herd investing

When it comes to stock investments, it is difficult to make money if you adopted a herd investing mentality. A few months ago, a friend of mine sent me a text to  recommend investing in one of the local stocks, Yongnam. In his texts, he kept praising how good the company was, citing the various exciting business prospects and developments.
I did not solicit for his views on any stock investments before, so I was quite surprised that he tried to induce me to invest in this counter. Furthermore, I am not the sort of person who is easily influenced by others when it comes to stock investment and normally I would do my own research before investing in any counters.
stock market

So I chided him for trying to induce me to invest in Yongnam. Of course he denied flatly and vehemently defended that he was just sharing good stuff. I gave him the benefit of my doubts since he is my good friend, nonetheless, I did not invest in Yongnam.

One of the most common mistakes made by new Singapore investors is the tendency to adopt a herd mentality. Tempted to make quick profits, many novice or inexperienced investors enter the stock market and rely solely on rumors and tips from friends or brokers. As they lack the knowledge to invest on their own, this group of young investors value opinions of friends, brokers or relatives when it comes to investing. I am quite concerned for this group of uneducated investors because many of them will confess their regrets after paying expensive “school fees”.

To a large extent, it is not entirely their fault. Our education system is not shaped to provide guidance on personal finance and investment to our students. Many young adults are suddenly thrust into working life

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