How to keep control of your emotions
If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.
Greed
Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.
Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.
Fear
The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.
Tip: Start with a plan, and stick to it. For added security, consider placing stops to reduce any losses and limits to lock in profits.
Hope
While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.
Tip: Set realistic goals. Be happy with what you have earned, rather than frustrated by what you could have earned.
Frustration
Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.
Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.
Boredom
Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.
Tip: Open an online demo account and get your thrills without risking real money.
A year of lockdowns has done strange things to investors around the world, who are now showing signs of going stir crazy.
Too many are being sucked into the sudden fads and frenzies gripping today’s manic market, buying all sorts of weird investments in an attempt to make a fast buck, or to amuse themselves behind locked doors with nothing much else to do.
All too often, they are buying into complex financial instruments they don’t understand, or are rotten investments by any sensible measure. Some are having fun, others can’t stop themselves.
Investors have always been at the mercy of their emotions. Greed and fear are the two biggest, but hope, frustration and boredom have also come to the fore over the past year. If you don’t keep yours under control, you could pay a high price.
The Covid-19 pandemic is partly to blame. With sporting events written off, spread betters and online gamers had to find other amusements, and taking a chance on the performance of financial assets was one of them.
Many had extra money to play with after saving cash during pandemic-induced movement restrictions, while fiscal and monetary stimulus has flooded markets with hot money, driving up asset prices everywhere.
The incredible returns from US tech titans and Bitcoin are also at fault. Stories about investors buying Amazon shares at launch or Bitcoin back in 2009 have filled investors with FOMO, or the fear of missing out.
Others are getting rich, why can’t I? That kind of philosophy can’t end well.
US “meme” stocks, cinema chain AMC Entertainment and bricks-and-mortar video games retailer GameStop, are possibly the craziest of all.
AMC has been hit hard by cinema closures and the streaming boom, while most gamers now download games online, rather than buy them in GameStop’s stores.
They should be crashing, but instead they’re flying to the moon.
Short sellers who sniffed an opportunity have been thwarted by hyped-up retail traders on Reddit bulletin boards, who join forces to beg, bully and cajole each other to buy these two stocks on free investment apps such as Robinhood.
Some investors have made big money, with AMC’s share up an incredible 2,850 per cent year to date. If you had invested $10,000 in AMC on January 5, you would have a thumping $298,500 today. GameStop is up 1,186 per cent.
Calculations like that are prone to drive investors crazy, but most will not have made anything like this return, having bought too late. If you bought GameStop on June 8 when the price spiked beyond $300, you would be sitting on a 25 per cent loss.
By contrast, Bitcoin’s recent growth looks pathetic. It is up just 33 per cent year to date, from $29,374 to $39,180 at the time of writing. Ethereum has done better, rising 236 per cent, but this year’s cryptocurrency stand out is Dogecoin, up a ridiculous 6,645 per cent. Although if you bought on May 7, you would have lost more than half your money.
The fact that a dog-meme alt-coin with no practical uses is this year’s best investment tells you everything you need to know about the current investor mentality.
Cryptocurrencies and penny stocks offer the same psychological thrill as gambling, and can be just as addictive
Chaddy Kirbaj,
vice director at Swissquote Bank
Many are now gripped by “impulse investing”, says Chaddy Kirbaj, vice director at Swissquote Bank. “Cryptocurrencies and penny stocks offer the same psychological thrill as gambling and can be just as addictive.”
Cheap money and low interest rates are driving today’s aggressive fluctuation and younger investors are getting caught up in the excitement. This looks like a fad but it could be the future, Mr Kirbaj says.
“Generation Z investors have a totally different mentality and will play a bigger role as time goes on due to sophisticated new technology, AI trading tools and the disruptive tech boom,” he adds.
But some things do not change, he adds. “There are exciting opportunities out there, but it is still prudent to follow the old tactics of risk management, diversification and self-control.”
The AMC frenzy has partly been triggered by the hunt for “re-opening stocks”, which could benefit from the easing of social restrictions, Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, says. “Strong cinema takings and a loss of appetite for cryptocurrency following recent falls adds to the swirl of interest.”
Investors must avoid following the herd into speculative stocks like these two, Ms Streeter says. “Only dabble at the edges of your portfolio with money you can afford to lose.”
The madness could go on a lot longer than many people realise, Matt Weller, Gain Capital’s global head of market research, says. “As we’ve seen with Tesla Motors and certain cryptocurrency assets over the past year, the question isn’t whether these movements are reasonable, but where they will stop?”
Short-term day traders can find amazing opportunities but when the bullish sentiment turns, it can be traumatic.
Only dabble at the edges of your portfolio with money you can afford to lose
Susannah Streeter,
senior investment and markets analyst, Hargreaves Lansdown
So, what could kill the frenzy? The greatest threat is inflation, which would force central banks to cut stimulus and increase interest rates, which would kill off today’s easy money culture.
To avoid succumbing to today’s mania, pause before you hit the buy button, David Kimberley, an analyst at trading app Freetrade, says. “Never buy due to short-term share price movements, whether up or down. Follow in-depth analysis of how a company might actually perform over the long term.”
Don’t believe in the myth of the winning streak. “Like any other thing that involves taking risk and getting a reward, a successful investment can make you feel pretty pleased with yourself. You might end up thinking all trades you make are destined for glory, but they’re not.”
Too many treat the market like a horse race, he says. “You might make a quick buck here and there but, overall, you are likely to have many more ‘losing’ stocks than ‘winning’ ones.”
Do not trade too frequently, Mr Kimberley says. “Say you bought shares in a company and they climb 25 per cent in a week. Don’t be too quick to cash in and move onto the next big thing. Who knows, if you had left them alone for six months, you might have made a 250 per cent return.”
If you can keep your head while all others around you are losing theirs, then you might just survive the coming crash. Otherwise, watch out.
The years Ramadan fell in May
Company%20profile
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Zayed Sustainability Prize
The five pillars of Islam
UAE currency: the story behind the money in your pockets
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UAE currency: the story behind the money in your pockets
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UAE%20ILT20
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What is blockchain?
Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.
The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.
Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.
However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.
Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.
Mohammed bin Zayed Majlis
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Mohammed bin Zayed Majlis
Mohammed bin Zayed Majlis
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
The biog
Name: Samar Frost
Born: Abu Dhabi
Hobbies: Singing, music and socialising with friends
Favourite singer: Adele
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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Padmaavat
Director: Sanjay Leela Bhansali
Starring: Ranveer Singh, Deepika Padukone, Shahid Kapoor, Jim Sarbh
3.5/5
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
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August 1-5: First Test, Edgbaston
August 14-18: Second Test, Lord's
August 22-26: Third Test, Headingley
September 4-8: Fourth Test, Old Trafford
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Cinco in numbers
Dh3.7 million
The estimated cost of Victoria Swarovski’s gem-encrusted Michael Cinco wedding gown
46
The number, in kilograms, that Swarovski’s wedding gown weighed.
1,000
The hours it took to create Cinco’s vermillion petal gown, as seen in his atelier [note, is the one he’s playing with in the corner of a room]
50
How many looks Cinco has created in a new collection to celebrate Ballet Philippines’ 50th birthday
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The hours needed to create the butterfly gown worn by Aishwarya Rai to the 2018 Cannes Film Festival.
1.1 million
The number of followers that Michael Cinco’s Instagram account has garnered.
Killing of Qassem Suleimani
Poacher
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KILLING OF QASSEM SULEIMANI
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
KILLING OF QASSEM SULEIMANI
Killing of Qassem Suleimani
The view from The National
How to keep control of your emotions
If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.
Greed
Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.
Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.
Fear
The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.
Tip: Start with a plan, and stick to it. For added security, consider placing stops to reduce any losses and limits to lock in profits.
Hope
While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.
Tip: Set realistic goals. Be happy with what you have earned, rather than frustrated by what you could have earned.
Frustration
Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.
Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.
Boredom
Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.
Tip: Open an online demo account and get your thrills without risking real money.
