I believe there is no place other than the stock market that you will experience so much fear and greed in life. Just a few days ago, we were creeping so close to a correction. Now, just like a fire hose with the hydrant fully turned on, liquidity starts gushing into equity market. Has anything changed significantly in the last few days? Not that I know of. It is a completely different feeling and environment today. How do we explain this?
It is all about greed and fear. Emotion and expectation can run high when there is hope. However, when there is hope, there is greed. When there is greed, there is fear of losing. When there is fear of losing, there is panic. The reverse is equally true. When emotions are down, we lose hope. When there is little hope, we start to fear. Fear will eventually lead to panic.
We have a famous saying from Sun Tze "If you know your enemy and yourself, you can win a hundred battles". Knowing yourself is just as important as knowing the market. Learning to control thy emotions can make you think clearly and act rationally. In the meantime, happy investing.
Disclaimer: The content in this blog contains purely my personal opinion and it is in no way a substitute for professional financial advice. You should seek advice from a professional financial advisor with any question regarding your financial matters.
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