Greed can make you lose (even more) control
"Greed" is described as an excessive desire for wealth, especially to the extent that it leads to irrational decision-making.
Stoicism, an ancient Greek philosophy, advocates for the recognition of what is within our control and what is not, urging individuals to direct their efforts and energy towards their actions and attitudes rather than external events.
In contrast, greed frequently leads traders to overlook or underestimate risks in their quest for higher returns, potentially resulting in substantial losses. Greed causes traders to believe what they wish to believe, instead of following a methodical, rational approach (that they eventually designed themselves).
Are you greedy? (Questions you ask yourself indicating your greed)
If you find yourself pondering the question below, then yes, you are greedy.
"If I had invested all my savings in this trade, I could be rich by now, and my life would have changed today."
Don't misunderstand me, it's human to experience greed; the challenge is to be aware of it and to make disciplined choices, not decisions based on a moment of greed.
The difficulty with this thought is its truth. Had you invested all your savings (say, $100,000 in $PEPE on February 24th) and sold it on March 1st, you indeed could have become a millionaire in just 10 days.
But what if you were wrong? What if it completely plummeted, which was entirely possible? You might have ended up losing, say, 60% of your life savings, leaving you with $40,000.
Not everyone can endure such a loss without being profoundly affected by the repercussions of this poor decision, not to mention the past and future years of wealth accumulation lost.
Be patient and disciplined, or you will live with regret for the rest of your life
Warren Buffett, one of the most successful investors in history, once stated:
"The stock market is designed to transfer money from the Active to the Patient."
Buffett's perspective emphasizes a long-term view of wealth creation. Rapid gains, like becoming a millionaire in 10 days, are exceptionally rare and often involve risks that can lead to equally rapid and devastating losses. A focus on long-term investing strategies, diversified portfolios, and consistent growth is more likely to lead to sustainable wealth over time.
But you already know this, don't you?
If you're not incorporating this philosophy into your approach today, I can assure you, after suffering devastating losses, you won't have the energy to do so, and you will pay the price for the rest of your life (which I sincerely hope you do not).