Investor Psychology vis-a-vis Market Movements
There are no market geniuses. Just those savvy in controlling their emotions. You can never get wealthy if you let emotion get the better of you. But if you rein in your impulses, you have a very good shot to accumulate wealth. When the market is bullish, everyone is on an investing spree. Along comes the inevitable correction, and those very funds are kicked to the curb. What has changed? Just sentiment. If the market falls on a certain day, fear dominates and investors are reluctant to invest. Once the market bounces back, greed takes over. Ironically is, investors perceive an investment to be more risky when nobody is buying and the price (NAV) is low, and less risky when everyone is buying and the price (NAV) is high. Laughable isn't it? How does one counter the impulse to act? Give thought to your Investment. Value investing is about buying a stock or fund quoting less than its intrinsic value. If you make a purchase higher than its intrinsic value, you are looking at the...