Gold investment is most tabooed by 'greed' and 'fear'

I have seen many investors who clearly chose the right direction but ended up not making money, or even losing money, and the problem lies in two words: greed and fear.

First, let's talk about greed.

For example, someone bought gold, made a 5% profit, and thought it wasn't enough, wanting to wait until they made 10% to sell; when it really rose to 10%, they hoped for 20%. As a result, after rising to a certain extent, it began to adjust, not only giving back the profits but also possibly losing the principal. Some friends, seeing a good upward trend, thought about 'making more,' throwing all their money in, even leveraging, and ended up getting stuck during a correction.

The essence of greed is forgetting your investment goals. When you initially bought gold, was it to make some pocket money, or to preserve your assets? If it’s the latter, reaching a reasonable return allows for profit-taking; there’s no need to be insatiably greedy.

Now let’s talk about fear.

Fear is more terrifying than greed because it leads you to make completely irrational decisions. For example, if the gold price drops slightly, you worry it will plummet and quickly cut losses; or if you see news saying 'the gold bull market has ended,' you panic and sell all your gold.

I remember a time last year when, due to rising expectations of interest rate hikes by the Federal Reserve, the gold price fell for a week. Many people panicked and sold off, and not long after, geopolitical conflicts escalated, and gold prices reached a new high. Those who cut losses regretted it deeply.

In fact, fear stems from a lack of understanding of the market. If you know that gold prices fluctuate in cycles and short-term volatility doesn’t affect long-term trends; if you know that the money you invested is spare cash that you can afford to lose, you wouldn’t be so afraid.

So, how do we overcome greed and fear?

I have two suggestions for everyone:

1. Set clear goals: Think ahead before buying, decide at what price you will sell when it rises and at what price you will sell when it falls, and strictly execute it without changing your mind due to greed or fear. For example, if you set a take-profit at 15% and a stop-loss at 5%, sell decisively when it reaches those points, without hesitation.

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2. Learn more and think less irrationally: The more you understand the market, the less likely you are to be swayed by emotions. Read more about the Federal Reserve's policy reports, understand global economic conditions, and clarify the logic behind price fluctuations, and you will find that those short-term fluctuations are actually paper tigers.