Are You Logical? Answer These 5 Questions to Find Out

Last Updated May 16, 2011 1:36 PM EDT

Do you make investment decisions based on sound logic, or are your choices emotionally driven?

While you may be able to answer that question based on your portfolio's performance, this simple five question quiz can also offer you some insights. If you understandi how you make investment decisions, you can

Question 1 - Which stock do you sell?
You have been given $10,000 and bought 100 shares of two different stocks at $50/share each. Over the next month, one stock moved down to $25/share while the other moved up to $75/share. If you have to sell one stock, which do you sell?

a. The $25/share stock

b. The $75/share stock

Note: Picture from JohnWinsor.com
Turn the page for the answer.
  • Allan Roth On Twitter»

    Allan S. Roth is the founder of Wealth Logic, an hourly based financial planning and investment advisory firm that advises clients with portfolios ranging from $10,000 to over $50 million. The author of How a Second Grader Beats Wall Street, Roth teaches investments and behavioral finance at the University of Denver and is a frequent speaker. He is required by law to note that his columns are not meant as specific investment advice, since any advice of that sort would need to take into account such things as each reader's willingness and need to take risk. His columns will specifically avoid the foolishness of predicting the next hot stock or what the stock market will do next month.

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