Today’s gold price has dropped by Rs. 600 per tola.
According to the Federation of Nepal Gold and Silver Dealers’ Association’s official website, fine gold is currently trading at Rs. 103,000 per tola. Yesterday, the rate remained unchanged at Rs. 103,600 per tola. Meanwhile, Tejabi gold is currently trading at Rs. 102,500. In contrast, the rate was kept at Rs. 103,100 per tola yesterday.
Today’s gold price has dropped by Rs. 200 per tola.
According to the Federation of Nepal Gold and Silver Dealers’ Association’s official website, fine gold is now trading for Rs. 103,600 per tola. Yesterday, the cost remained unchanged at Rs. 103,800 per tola. Meanwhile, Tejabi gold is currently trading at Rs. 103,100. In contrast, the cost was kept at Rs. 103,300 per tola yesterday.
Silver has lost Rs. 5 per tola on the sidelines. Today’s local market price for the gleaming white metal is Rs. 1,290 per tola, compared to yesterday’s closing price of Rs. 1,295 per tola.
Gold is currently trading at $1,845.30 per ounce in USD, while silver is trading at $21.69 per ounce on the international market.
Today’s gold price has risen by Rs. 500 per tola.
According to the Federation of Nepal Gold and Silver Dealers’ Association’s official website, fine gold is now trading for Rs. 104,600 per tola. Yesterday, the tariff remained unchanged at Rs. 104,100 per tola. Meanwhile, Tejabi gold is currently trading at Rs. 104,100. In contrast, the cost was kept at Rs. 103,600 per tola yesterday.
On the other hand, silver is holding steady at Rs. 1,320 per tola.On the international market, gold is now priced at $1,878.20 per ounce in USD.
Today’s gold price has dropped by Rs. 1,400 per tola.
According to the Federation of Nepal Gold and Silver Dealers’ Association’s official website, fine gold is currently trading at Rs. 106,100 per tola. Yesterday, the rate remained unchanged at Rs. 107,500 per tola. Meanwhile, Tejabi gold is currently trading at Rs. 105,600. In contrast, the rate was kept at Rs. 107,000 per tola yesterday.
In the Nepalese market, the price of gold has reached an all-time high. The gain for today is the result of a Rs. 1200 single-day gain from yesterday’s price.
According to the Federation of Nepal Gold and Silver Dealers’ Association’s official website, fine gold is currently trading at Rs. 107,500 per tola. Yesterday, the rate remained unchanged at Rs. 106,300 per tola. Meanwhile, Tejabi gold is currently trading at Rs. 107,000. In contrast, the rate was kept at Rs. 105,800 per tola yesterday.
The price of gold has surged by Rs. 500 in the domestic market today.
According to the official website of the Federation of Nepal Gold and Silver Dealers’ Association, fine gold is being traded today at Rs. 106,300 per tola. Yesterday, the rate was maintained at Rs. 105,800 per tola. Meanwhile, Tejabi gold is being traded at Rs. 105,800 today. In contrast, the rate was maintained yesterday at Rs. 105,300 per tola.
Alright, so you’ve decided you want to take a shot at buying and trading stocks. The only problem is, you really don’t know how. Where should you begin? And do you even know what a stock is and the significance of stock for companies?
This article will serve as a dummies guide for trading and buying stock.
A stock is actually partial ownership of a company. Some companies consider stocks as certificates so the more stock a person owns of the company, the larger portion of the company they own. Along with owning a bigger part of the company, they also have greater influence in running the company. This influence is referred to as equity investment.
There are other important terms you should become familiar with before getting into the stock market. Get to know about leverage, price-earnings ratio, earnings per share, margins and options before you dive in and invest your hard-earned money.
Next you need to figure out where and how to purchase those stocks. Basically, there is only one way to buy shares and stocks. Through your stock broker.
Online exchanges let investors have access to stocks from all around the globe. Without the need for a broker, investors can purchase and sell stocks online. Some banks also give you the ability to set up your own stock portfolio. You can use the money you have invested with these banks to purchase and sell stocks online right away.
Brokers render brokerage services and they are the middlemen who do the work on your behalf. Brokers give advice, research the current stock market and buy and sell stocks in accordance with the requests of their clients. From buying and selling these stocks, the brokers earn a commission.
When you decide on how you prefer to purchase and sell stocks, you need to open an account. Exchanges will allow you to monitor and control your individual stock portfolio yourself. If you decide to enter into the stock trade with a bank, discuss the specifics of setting up your own account with the bank you choose. For conducting trades through a broker, you need to find a reputable broker to deal with and then ask them to open and manage your account.
Once you set up an account successfully, start studying the stock market to plan your strategy. Do you want to be conservative when making investments? Do you like to aggressively invest? How many investing years do you have? Are you a day trader or will you be investing on a long term basis?
When you determine your personal plan, do your research on the current stocks offered in the market. If you have a broker, it becomes easier because they do much of the research for you. However, it is still best to study the market on your own.
Remember, the stock market is a volatile place so be ready for explosive activity when trading and buying stocks. Like life, there are many ups and downs before you reach your goals.
How does the stock market work? In a nutshell, the stock market is a market place for business people. Goods are sold to the public in a public market. However, in the stock market, the public is sold share. Shares are the form in which company stock is sold. When a person purchases more shares in a company, they have a higher ownership in that company.
In the stock market, there is the primary market and the secondary market. In the primary market, companies sell shares to investors to raise financing for their operating expenses. In the secondary market, investors buy and sell shares in companies to other investors. Constantly changing market conditions are the basis of those buy and sell decisions.
A stock market operates much like an auction house, with a systematic way of buying and selling. The system in the stock market involves a great deal of bustling activity. Often there are people running around frantically, shouting and gesturing at one another.
The purchase and sale of stock starts at various places. A broker is contacted if a person wants to buy stocks in a certain company. The broker will take the investor’s money to the stock exchange to coordinate with a floor broker.
In most cases, the floor broker works for the company selling stock. Right on the stock exchange floor, brokers buy the desired stock for the investor. Once the deal is made, it is communicated to a broker and the investor then becomes a stockholder of that particular company.
Investors may decide to sell their stock. Usually investors want to sell their stock when the price per share increases so they can realize a profit on their investment. For example, a person may purchase 100 shares at the price of $25 per share. When the price increases to $35 per share, the person can sell the 100 shares and make a profit of $1,000.
The driving force behind the stock market is the basic economic principal of supply and demand. The number of stocks open to the public is the supply. The number of shares that investors what to purchase affects the demand of the stock in a certain company.
The constant change in the cost of stock is a result of conditions in other markets. For example, if people feel that the economy is growing they are apt to purchase more stocks. However, when the economy is in a decline, the majority of investors tend to sell off their stocks. On the flip side, some investors use this time to buy because the stock prices are usually at a discount.
There are quite a few business people who make long term investments in the stock market. In some situations, stocks go down in value and a stockholder loses money. There is no guaranteed profit when investing in the stock market. Thus, when a person is flexible and able to handle the constant changes of the stock exchange they are more likely to experience a profit.
So this is how the stock market works. In the end, patience, education and experience usually equals greater long term success.
Are you a college student? Do you wish to supplement your pocket money with a little additional cash? We understand that working a 9-5 office job will interfere with your studies. However, you can undertake an online job in your leisure time without investing any money. You can make good money from an internet job if you work hard. Many Nepalese people work full-time from their homes doing online work. There are no headaches from the 9-5 office job, and there are no headaches from the boss. You have the option of being your own employer. You can work whenever you wish. You’ll make some extra money in your spare time, and it won’t interfere with your studies.
But first, you should be aware that there are numerous scams involving online jobs on the internet. You must be aware of the deception. “Earn $1000 a day,” “$100 per hour,” and “earn $100 while you sleep” are some of the advertisements. They’re all con artists. You must be aware of their existence.
Yes, you can make the money mentioned above, but it will take a lot of commitment, time, knowledge, and hard work. You should make it a full-time job. However, for a student whose primary attention should be on their studies, earning $100 or $1,000 every day without a significant time or financial investment is nearly difficult. However, as in Nepal, $100 a month is sufficient for students’ pocket money, which they can earn completing internet jobs in their leisure time without investing.
To do the online work, you’ll need decent computer skills and access to the internet. So, let’s get started.
1. YouTube
YouTube is the finest and simplest way to earn money online without having to invest any money. You must have just used YouTube to look for videos. However, did you know that YouTube compensates the video’s publisher for each view? You can also make money using it. You don’t need a professional video camera to do this. It will be done for you via your smartphone. Make a video using your smartphone that is amusing, entertaining, or interesting. Make a video that you think people will enjoy. Create a YouTube channel, monetize it with Adsense, and when your videos go viral or receive a lot of views, you’ll be able to start making money right away.
2. Blogging
Blogging is an online diary in which one or more people publish articles in chronological order on any topic and keep it updated on a regular basis. You can create your own blog if you are an expert on any subject. There are numerous platforms from which to launch a blog. Blogger.com, on the other hand, is the greatest blogging platform for beginners or students. You can start writing articles on a blog without spending any money. Use social media to spread the word about this article. Once you have a good number of visitors, you can monetise your site with Adsense. After that, you will be compensated when someone views your blog and clicks on your advertisements.
3. PTC (Paid To Click)
PTC is another option to make a small amount of money without having to invest anything. We used the word “little” because it only pays a small amount every click. If you search the Internet for PTC websites, you will find a plethora of them, however the most of them are scams and fakes. So, before joining such a website, you should check the website’s review on the internet or ask me. If you wish to work on PTC sites, we propose Clixsense.com or Neobux.com. After you join the website, they will send you adverts to click, and they will pay you as little as 0.01$ (about NRs) for each click. Worst of all, there is a daily limit on the number of advertising you can receive. So, we wouldn’t encourage it, but if you’re lazy and don’t want to put in the effort to write or upload videos to YouTube, it’s worth a go.
4. Facebook
In both the United States and Nepal, Facebook is the most popular social networking site. It is Nepal’s most viewed website, ranking first. You must have a Facebook account if you are reading this post; if not, you may establish one. The majority of students’ time is spent on Facebook. So, you’re wondering how you make money on Facebook. Create a Facebook page for a certain topic, post updates on a regular basis, and grow the page. You can sell your Facebook page once you have a large number of fans. Many people purchase Facebook pages at a reasonable fee. All you have to do is put forth the effort. This does not necessitate any financial investment.
5. Affiliate Marketing
Affiliate marketing is a type of web marketing that allows you to promote a product from a variety of vendors. As a result, if you become an associate of a merchant and want to advertise their product, you will be given a unique link. You can promote the link for free on many forums and social networking sites such as Facebook, Twitter, and YouTube. And if someone buys something through your link, you get paid a percentage of what the dealer offered. This is difficult, but if you put in the effort, you can make a lot more money with Affiliate Marketing. Though affiliate marketing can help you make a lot of money if you invest, it can also help you make a lot of money if you don’t.
These are the 5 internet jobs for students who want to make money without having to invest any money. We’ve just touched on a small portion of it. If you want to do any of the above-mentioned online occupations, please let us know in the comments section or contact us. We’ll provide you a step-by-step tutorial to get you started.
Everyone is looking for a quick and easy way to riches and happiness. It seems to be human nature to constantly search for a hidden key or some esoteric bit of knowledge that suddenly leads to the end of the rainbow or a winning lottery ticket.
While some people do buy winning tickets or a common stock that quadruples or more in a year, it is extremely unlikely, since relying upon luck is an investment strategy that only the foolish or most desperate would choose to follow. In our quest for success, we often overlook the most powerful tools available to us: time and the magic of compounding growth. Investing regularly, avoiding unnecessary financial risk, and letting your money work for you over a period of years and decades is a certain way to amass significant assets.
Here are several tips that should be followed by beginning investors.
Everyone is looking for a quick and easy way to riches and happiness. It seems to be human nature to constantly search for a hidden key or some esoteric bit of knowledge that suddenly leads to the end of the rainbow or a winning lottery ticket.
While some people do buy winning tickets or a common stock that quadruples or more in a year, it is extremely unlikely, since relying upon luck is an investment strategy that only the foolish or most desperate would choose to follow. In our quest for success, we often overlook the most powerful tools available to us: time and the magic of compounding growth. Investing regularly, avoiding unnecessary financial risk, and letting your money work for you over a period of years and decades is a certain way to amass significant assets.
Here are several tips that should be followed by beginning investors.
1. Set Long-Term Goals
Why are you considering investing in the stock market? Will you need your cash back in six months, a year, five years or longer? Are you saving for retirement, for future university expenses, to purchase a home, or to build an estate to leave to your beneficiaries?
Before investing, you should know your purpose and the likely time in the future you may have need of the funds. If you are likely to need your investment returned within a few months, consider another investment; the stock market with its volatility provides no certainty that all of your capital will be available when you need it.
By knowing how much capital you will need and the future point in time when you will need it, you can calculate how much you should invest and what kind of return on your investment will be needed to produce the desired result.
Remember that the growth of your portfolio depends upon three interdependent factors:
Ideally, you should start saving as soon as possible, save as much as you can, and receive the highest return possible consistent with your risk philosophy.
2. Understand Your Risk Tolerance
Risk tolerance is a psychological trait that is genetically based but positively influenced by education, income, and wealth (as these increase, risk tolerance appears to increase slightly) and negatively by age (as one gets older, risk tolerance decreases). Your risk tolerance is how you feel about risk and the degree of anxiety you feel when risk is present. In psychological terms, risk tolerance is defined as “the extent to which a person chooses to risk experiencing a less favourable outcome in the pursuit of a more favourable outcome.” In other words, would you risk NPR 1000 to win NPR 10,000? Or NPR 10,000 to win NPR 10,000? All humans vary in their risk tolerance, and there is no “right” balance.
Risk tolerance is also affected by one’s perception of risk. For example, flying in an aeroplane or riding in a car would have been perceived as very risky in the early 1900s, but less so today as flight and automobile travel are common occurrences. Conversely, most people today would feel that riding a horse might be dangerous with a good chance of falling or being bucked off because few people are around horses.
The idea of perception is important, especially in investing. As you gain more knowledge about investments – for example, how stocks are bought and sold, how much volatility (price change) is usually present, and the difficulty or ease of liquidating an investment – you are likely to consider stock investments to have less risk than you thought before making your first purchase. As a consequence, your anxiety when investing is less intense, even though your risk tolerance remains unchanged because your perception of the risk has evolved.
By understanding your risk tolerance, you can avoid those investments which are likely to make you anxious. Generally speaking, you should never own an asset which keeps you from sleeping in the night. Anxiety stimulates fear which triggers emotional responses (rather than logical responses) to the stressor. During periods of financial uncertainty, the investor who can retain a cool head and follows an analytical decision process invariably comes out ahead.
3. Control Your Emotions
The biggest obstacle to stock market profits is an inability to control one’s emotions and make logical decisions. In the short-term, the prices of companies reflect the combined emotions of the entire investment community. When a majority of investors are worried about a company, its stock price is likely to decline; when a majority feel positive about the company’s future, its stock price tends to rise.
A person who feels negative about the market is called a “bear,” while their positive counterpart is called a “bull.” During market hours, the constant battle between the bulls and the bears is reflected in the constantly changing price of securities. These short-term movements are driven by rumours, speculations, and hopes – emotions – rather than logic and systematic analysis of the company’s assets, management, and prospects.
Stock prices moving contrary to our expectations create tension and insecurity. Should I sell my position and avoid a loss? Should I keep the stock, hoping that the price will rebound? Should I buy more?
Even when the stock price has performed as expected, there are questions: Should I take a profit now before the price falls? Should I keep my position since the price is likely to go higher? Thoughts like these will flood your mind, especially if you constantly watch the price of a security, eventually building to a point that you will take action. Since emotions are the primary driver of your action, it will probably be wrong.
When you buy a stock, you should have a good reason for doing so and an expectation of what the price will do if the reason is valid. At the same time, you should establish the point at which you will liquidate your holdings, especially if your reason is proven invalid or if the stock doesn’t react as expected when your expectation has been met. In other words, have an exit strategy before you buy the security and execute that strategy unemotionally.
4. Handle Basics First
Before making your first investment, take the time to learn the basics about the stock market and the individual securities composing the market. There is an old adage: It is not a stock market, but a market of stocks. Your focus will be upon individual securities, rather than the market as a whole. There are few times when every stock moves in the same direction; even when the averages fall by 100 points or more, the securities of some companies will go higher in price.
The areas with which you should be familiar before making your first purchase include:
Knowledge and risk tolerance are linked. As Warren Buffett said, “Risk comes from not knowing what you are doing.”
5. Diversify Your Investments
Experienced investors such as Buffett eschew stock diversification in the confidence that they have performed all of the necessary research to identify and quantify their risk. They are also comfortable that they can identify any potential perils that will endanger their position, and will be able to liquidate their investments before taking a catastrophic loss.
The popular way to manage risk is to diversify your exposure. Prudent investors own stocks of different companies in different industries, sometimes in different countries, with the expectation that a single bad event will not affect all of their holdings or will otherwise affect them to different degrees.
Imagine owning stocks in five different companies, each of which you expect to continually grow profits. Unfortunately, cirplusstances change. At the end of the year, you might have two companies (A & B) that have performed well so their stocks are up 25% each. The stock of two other companies (C & D) in a different industry are up 10% each, while the fifth company’s (E) assets were liquidated to pay off a massive lawsuit.
Diversification allows you to recover from the loss of your total investment (20% of your portfolio) by gains of 10% in the two best companies (25% x 40%) and 4% in the remaining two companies (10% x 40%). Even though your overall portfolio value dropped by 6% (20% loss minus 14% gain), it is considerably better than having been invested solely in company E.
6. Avoid Leverage/Margin Loan
Leverage/Margin loan simply means the use of borrowed money to execute your stock market strategy. In a margin account, banks and brokerage firms can loan you money to buy stocks, usually 50% of the purchase value. In other words, if you wanted to buy 1000 shares of a stock trading at NPR 100 for a total cost of NPR 100,000, your brokerage firm could loan you NPR 50,000 to complete the purchase.
The use of borrowed money “levers” or exaggerates the result of price movement. Suppose the stock moves to NPR 200 a share and you sell it. If you had used your own money exclusively, your return would be 100% on your investment [(200,000 -100,000)/100,000]. If you had borrowed NPR 50,000 to buy the stock and sold at NPR 200 per share, your return would be 300 % [(200,000-50,000)/$50,000] after repaying the NPR 50,000 loan and excluding the cost of interest paid to the broker (which is usually 16% and over).
It sounds great when the stock moves up, but consider the other side. Suppose the stock fell to NPR 50 per share rather than doubling to NPR 200, your loss would be 100% of your initial investment, plus the cost of interest to the broker [(50,000-50,000)/50,000].
A margin is a tool that can go extremely bad in a stock market like Bangladesh.
Final Thoughts
Stock investments historically have enjoyed a return significantly above other types of investments while also proving easy liquidity, total visibility, and active regulation to ensure a level playing field for all. Investing in the stock market is a great opportunity to build large asset value for those who are willing to be consistent savers, make the necessary investment in time and energy to gain experience, appropriately manage their risk, and are patient, allowing the magic of compounding to work for them. The younger you begin your investing avocation, the greater the final results – just remember to walk before you begin to run.
Nepal Stock Exchange (NEPSE) is the country’s sole stock exchange. It is located in Kathmandu, Nepal, at Singha Durbar Plaza.
In 2033 BS, the government established a security purchasing and trading center in Nepal. In 2050 BS, the same location became the Nepal Stock Exchange Limited (NEPSE).
On January 13, 1994, the Nepal Stock Exchange (NEPSE) inaugurated its trading floor (29 Poush, 2050). It is Nepal’s sole stock exchange. As of May 13, 2020, the total market capitalisation of the companies listed on NEPSE is around Rs 1.54 trillion.
The primary function of the stock exchange is to facilitate the trading of listed securities. NEPSE has been trying to register publicly issued securities in the secondary market so that they can be traded easily. This is referred to as listing.
The Nepal Stock Exchange Limited (NEPSE) is a specialized government-owned entity governed by the Companies Act. It does business in compliance with the Securities Act. Its principal goal is to assist to the country’s economic development through capital formation and mobilization, as well as to stimulate investor interest by establishing a secondary market for the trading of securities issued by the Government of Nepal and organizations.
Nepse has been a prominent regulatory organization in terms of market operations, listed firms, and securities dealers, in keeping with its goal of trading shares, bonds, mutual fund units, and other securities through member brokers.
At the moment, the Nepal Stock Exchange offers general investors the ability to purchase and sell securities through 50 member brokers and 41 Remote Work Stations (RWS) in key cities both inside and outside the Kathmandu Valley.
The brokerage firm and its branches are spread across 21 different cities in Nepal.
Nepal’s capital market is in its early phases of development due to the size of the market, kind of company, financial instruments to be exchanged, laws and regulations, technology utilized for business, other physical infrastructure, manpower, and so on.
Similarly, Nepse is a founder member and current Executive Board Member of the South Asian Federation of Exchanges. It is also an Affiliate Member of the World Federation of Exchanges, with plans to become a full member soon.
The Government of Nepal promotes the Nepal Stock Exchange (NEPSE). The Nepalese government owns 58.65 percent of NEPSE.
The significant shareholders of the Nepal Stock Exchange (NEPSE) are shown in the table below. It also includes a proportion of ownership.
| S.No | Shareholders | Share Ownership (%) |
| 1 | Government of Nepal | 58.65 |
| 2 | Nepal Rastra Bank | 34.6 |
| 3 | Rastriya Banijya Bank | 6.12 |
| 4 | Members(Brokers) | 0.62 |
According to the Securities Act of 2006, the Board of Directors (BOD) of the Nepal Stock Exchange (NEPSE) is made up of members from various sectors. The BOD now consists of two members from the Nepal Government, one from Nepal Rastra Bank, and one from Rastriya Banijya Bank. Furthermore, the BOD will propose one member as a capital market expert. NEPSE’s General Manager will serve as a director on the BOD.
NEPSE index is the market value weighted index. This index shows the aggregate growth in capitalization of companies listed in Nepal Stock Exchange.
Nepse Index reached its all-time high of 1881.45 on July 27, 2016.
Index calculated from the market capitalization of companies classified under group “A” is called sensitive index.
The sub-indices in Nepse include:
1. Banking
2. Development bank
3. Finance
4. Microfinace
5. Manufacturing And Processing
6. Hydro Power
7. Non Life Insurance
8. Life Insurance
9. Hotels
10. Mutual Fund
11. Other
Provides a market platform for buying and selling of secondary shares, debentures and bonds.
Develops and expands the secondary market in the capital market by supporting the policy and guidelines of the Government of Nepal.
Regulates listed companies, brokers and investors.
Spreads public awareness about capital markets.
Regulates and monitors the listed public limited companies.
Take membership with national and international capital market organizations.
List new companies to trade on the stock exchange, as well as OTC companies that are not listed or disbanded.
Development and expansion of the capital market by increase the number of institutions involved in the market.
Runs a clean, transparent, credible, fair market and works in the interest of investors.
Since its top of 1881 in 2016, the Nepal Stock Exchange has been on a downward trend. The market dropped to as low as 1100, a drop of nearly 40% from its peak. Many investors lost a lot of money as a result of the devastating market meltdown.
If we ask investors right now if they thought the market was going to tumble after 2016, many will say yes. However, at the peak, investors were more bullish on the market. The massive quantity of everyday turnover demonstrates this. The daily transaction amount was between 1.5 and 2 billion rupees.
So, how does an investor’s opinion of the same event change? This is a psychological phenomena known as ‘Hindsight bias.’
The tendency of people to perceive events as more predictable than they actually are is referred to as hindsight bias. In other words, it makes the past appear less predictable than it was. Things always appear more evident after they have occurred.
Decision making is difficult prior to the occurrence due to a lack of information and foresight. However, looking at the available results after the event, the outcome appears more predictable.
During the bullish era in our market, investors were uninformed of the oncoming market disaster. As a result, many people were highly involved in stocks. Some people predicted that the market would crash. However, no one was certain at the moment.
However, after the market fall, investors believe that they were forewarned that the market would drop. With more information regarding the market crash becomes accessible, investors appear to be more sure about the event’s predictability.
Consider the following scenario: You are considering purchasing a stock called ABC. However, you do not purchase it for some reason. The price of ABC stock then skyrockets. What are your thoughts?
The answer is that you are stupid. You kick yourself for squandering the opportunity. You are remorseful for not purchasing the stock when you realized it was a winner. You tell yourself, ‘I knew the stock would soar.’ This is what we mean by hindsight bias.
So, what makes it dangerous? This is because you have made a promise to yourself that you would not make the same mistake again. You are more confident in your decision-making abilities, and you vow to seize the next opportunity. This is the danger that hindsight bias can cause. The next time might not be the same as the previous.
Let’s have a look at another scenario: You consider purchasing a stock called ABC. However, you do not purchase it for some reason. The price of ABC stock then plummets. Now consider if you would have felt the same way in the first situation.
No, it does not. You congratulate yourself on making a wise decision not to buy ABC stock. You knew the stock would decline, which is why you didn’t buy it in the first place.
Why is the response different in these two cases? In an ideal world, the answer in both cirplusstances would be the same. In both cirplusstances, you made the same decision not to acquire stock ABC prior to the rise or fall in its price. However, after the event occurs, such as a price rise or decline, you change your reaction in accordance with the nature of the occurrence.
This is risky because it gives you the impression that you knew it all along, giving you a false sense of security in your judgment. This can lead to overconfidence in your financial abilities and reckless decisions.
Several behavioral experts have recommended producing a list of everything that was considered when making the decision. This could be a good plan. We will know what our thought process was at the time of decision making if we make a record of the reasoning behind our decisions. We cannot change our statements after the event has occurred. This will aid us in making an accurate assessment of our abilities.
Investors may not consider hindsight bias as a concern. However, it may lead you to make decisions based on your perspective rather than facts.
In our daily lives, we experience hindsight bias. Whether it’s investing, gaming, exams, or anything else, the outcome makes us feel much more confident in our abilities. If Real Madrid beats Sevilla, we’ll tell ourselves and others that we knew Madrid was going to win. Similarly, if the stock/real estate price is rising, ‘I knew it’ comes into play.
Even if it hasn’t caused any immediate harm, it can make you overconfident, causing your next bet to be more illogical. Real Madrid won, but the outcome might be different the next time. Past events cannot be utilized to predict the future completely. Information and strategies evolve in tandem with the passage of time.
As a result, it is preferable to treat each possibility as new and base your judgment on facts. The past appears to be easy to anticipate, yet this is not the case. It is a hallucination that arises following the occurrence of the result. As a result, it is preferable to stick to your investing ideas and tactics.