Sunday, April 27, 2014

The worst reason in the world to buy anything is just because someone else did

How many times you can find yourself buying something as a result of just following the crowd or because someone else did?

It could be a hand phone, a gadget, a book, a music album, a drink, a food, a car, a property, or even an investment instrument (stock counter, futures, forex, mutual fund, etc.).

Why is it being the worst reason in the world to just follow someone else to buy something? Well, the keyword in the sentence is "just".

It is really a bad idea to blindly follow other people, particularly in buying, without your own reason(s) to do so.

Always remember the saying: one man's food is someone else's poison.

So, do not simply buy a stock just because Warren Buffett bought it. You need to find several other reasons to convince yourself before making the order.

Do not simply buy a property just because people around you have bought theirs. You need to assess your own financial situation, your gut feeling about the property, your planning, your willingness to manage it, etc.

Do not simply buy certain brand of smartphone just because people around you are using that phone. Have you find out the pros and cons of the phone? Have you find out the features and map them to your own need? Have you compare it with some other alternatives?

A lot of time, if we chose that worst reason in the world to buy something, we might end up buying the wrong thing, or buying the unnecessary, or even buying a nightmare. This is particularly true in the investment world.


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