Learn the Barriers of Investment - “Personal Attachment”

Extract From My Book "Psychology And Investment"

Many people have a personal attachment to the organization they work for over the years. It takes years to build strong pillars and these people worked hard to make such pillars for the organization. Many times, the new recruits do not even know what sacrifices the old generation has made to make such a strong pillar in the organization. But the ageing generation has only one objective, they want to keep their money safe for retirement. Therefore, the personal attachment to the organization is less in the newcomers and more in the older people.

Sometimes, because of this belief, older people accumulate too much stock in the company they work for years, thinking that all these investments are for their retirement. They forget that due to such activity the overall weightage of their portfolio has become unbalanced. Because of their personal feeling, they take interest in investing a huge amount of money in only one stock but they forget to remember that money has no emotion.

Such action diminishes the benefits of diversification and increases the risk of placing all the eggs in only one basket. Personal attachment to any company is another barrier that prevents from making a proper decision.

In my book, “Psychology and Investment” I have explained in detail what are those barriers, attractions and resistances which I observed while dealing with different types of persons.