5 Signs You Are Addicted to Investing

Making your first stock purchase may be a big step and new experience to a young investor – it certainly was for me. We’ve heard of the tragedies where people lost their entire retirement savings and we’ve heard of the fortunes of those who picked a winning stock.

But, of course we are hoping that we end up selecting the one company that will allow us to afford fancy luxury cars and feed all our friends in college. The dream is common among most new investors and such a rush can develop into an addiction to investing.

Many would say “I’m not addicted to investing. I just don’t want to lose all my money.” Well, from my experience, it wasn’t really about my fear of seeing a loss. My relentless string of refreshes of the Yahoo! Finance page was fueling my anticipation of see a green percentage next to my stock quote. After all, the ideal happy ending is a positive return on investment.

Here are some signs that you may be addicted to investing:

1. You check stock quotes every five minutes.
   In fact, you probably check the stock quotes in 30 second intervals right after you make your trade. You want to see how much the stock price went up. You yearn for a spike on the stock chart. Sadly, clicking the refresh button repeatedly has no effect on the performance of your stock.
2. You check your investment account balance every five minutes.
   You are not satisfied with punching ticker symbol after ticker symbol. Sure, the stock quote shows that your stock went up 5% but that doesn’t show your gain in real dollars – so you log onto your brokerage account at Scottrade every five minutes as well. You don’t really care how much your balance is because all you want is for that number to go up.
3. You invest every penny you have.
   Why save your money in an ING Direct account at a measly 1.50% APY when you can earn so much more on the stock market. You pour your paycheck into stocks because you know that the power of compounding dictates that more money can make MORE money.
4. You borrow and accumulate debt to invest.
   After using your funds to pay for rent and to buy more stocks, you live off your credit card for everything else. Wait. That isn’t enough for you. You open a margin account, take out 0% APR balance transfers, and borrow from your parents and friends.
5. You pay too much in commissions.
   Commissions are a crucial expense to any trader. So what? Maybe you are an aspiring daytrader – one that can stay at home and make thousands of dollars with a few clicks of the mouse. For some, it is very much like impulse shopping – to buy stuff for the sake of “buying”. Soon, the commission fees rack up and eat away at your returns.

It Isn’t Necessarily a Bad Thing
Addiction to investing certainly isn’t a bad thing. In fact, I’m guilty of exhibiting a few signs noted above (to a small degree). Such drive and risk-taking has led to big fortunes for young adults and have also ruined the financial futures of many others.

I’ve learned from looking back at my attitude towards investing that it is essential to building wealth but it is important not to be drowned in the moment. Investing in the stock market – the big pot of gold that it is – is a long term endeavor.

Have you come to the realization that you were somewhat addicted to investing?

(Photo credit: luisvilla)

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