The Psychology of Investing

Presented by the Hardee Investment Group and RBC Wealth Management – 

Many times we make investing too hard. Through the years, I have found investor psychology plays a major role in when to buy and when to sell. Read the following, and see if you can determine where we are in the current cycle. Also, think about where you were one year ago.


Market Direction
Your best friend and neighbor has a cocktail party to which you are not invited. The market is at the bottom. Call all of your clients, and tell them to buy if anyone will answer the phone.
A friend invites you to a cocktail party. However, when the other guests see you, they move to the other side of the bar. The market is in a basing formation and will rally shortly.
You are attending a cocktail party. People who know you come over to ask how the market closed today and what you think they should buy. The market is in a major upswing.
You are attending a cocktail party. When people hear you are an investment advisor, they come over and introduce themselves and discuss the market. The market has had a large rally, and there is good group rotation.
A client invites you to a cocktail party. When you enter the room, he asks everyone to be quiet for a moment while he introduces you to all assembled as “his investment adviser.” The market is nearing a top.
Your best friend invites you to a cocktail party and dinner in your honor. The market has reached the top. Call your clients the next morning, and tell them to sell everything. Of course, they won’t as they will think you are kidding. Therefore, sell everything you own so you will have the money to buy your own drinks as the market drops.

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The views presented herein are solely those of H.H. “Will” Hardee, and do not necessarily represent the views of RBC Wealth Management. Current status of issues discussed in this letter is subject to change based upon market conditions and industry fundamentals. Clients should work with their Financial Consultant to develop investment strategies tailored to their own financial circumstances. Past performance is no guarantee of future results. The name Hardee Investment Group refers to a group of Financial Consultants working in the Houston, Texas office of RBC Wealth Management. The Hardee Investment Group is not a separate legal or corporate entity. All services offered and all memberships referenced in the presentation refer to the services offered or registrations held through RBC Wealth Management. RBC Wealth Management, a division of RBC Capital Markets Corporation, Member NYSE/FINRA/SIPC.