When all is dark and bleak as the EU is falling apart, the perfect AAA rating is almost taken from the US and more, and investors are looking at 2011 as a doomed year, the smart investor must always remember that what goes down must come up (or is it the other way around?). Today we wanted to talk about some psychological effects of not so safe investors.

When gambling at the casino, one is hoping to profit, and relies mainly on luck. Even the not so safe stock market, you can sit at the computer to buy and sell in the comfort of your home, without using the investment and trading rules and clear and safe investment strategy clear and actually convert the stock market to a casino.

Since the casino gambler often loses his money, traders and stock market investors informed practices are required to earn. It is very easy to be tempted to use the stock exchange as a casino. However, anyone who chooses this way is not taking the wise safe investment path, and its road will be paved path losses.

Have you ever wondered why the casino always wins? One of the main reasons for which the casino will always have the upper hand over the gambler is that most gamblers stop gambling when they ran out of money, whereas the casino has no such limitation. Surprisingly many of those long-term stock market investors fall into the trap easily casinos. All you need is to do is to panic from a loss in the investment portfolio, fix your losses and not wanting to hear more about the stock market (until the next tide – of course).

Such behavior is very similar to the casino investment since the investor will be out of the market when the total loss reaches a level which he could not bear anymore. If the same investor would return to a lower market point, he was again out of the casino and returning the investment world. But because we are human beings (with shame, anger and other emotions), we prefer to repress and forget our losses. As a result, we do not want to hear about the stock market after severe losses.

So there is a basic rule for investors – those who can absorb the portfolio volatility for any reason (short-term investment, risk aversion …), must enters the stock exchange only through solid investment tools such as short-term Treasury bills, short government bonds, monetary funds and others. All the other high yield tools and papers are sutiable to those who can take a loss and still be in the market or take an active position where the market seems to be on the up rise again.