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Stock Market Psychology: Use it To Your Advantage

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Stock Market Cycles Chart Stock Market Psychology Grasping the stock market psychology is not too hard, but many investors are unaware of its existence or thoughtlessly neglect it while planning their investment strategies.  For long it was thought that the stock market must act rationally and sooner or later correct itself. Some investors still hold onto this belief, which is known as the " efficient market hypothesis ".  However, in modern times market psychology has been prone to more in-depth research. Nobel prize-winning Daniel Kahneman was one of the first economic researchers to doubt the validity of the efficient market hypothesis. Together with the famous cognitive and mathematical psychologist Amos Tversky they challenged the notion that the markets would always make rational decisions made on relevant and publicly available information. They made the case that humans suffer from a palpable cognitive bias when it comes to financial decision-making and specifically ...
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Market Cycle Psychology: What You Need to Know

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Market Cycle Psychology Market cycle psychology is an interesting phenomenon. The price trend in different markets tend to follow certain patterns (whether it's stocks, commodities, housing, or cryptocurrencies). This holds especially true in a so-called market bubble . Market cycle psychology is not an exact science but can roughly be explained by the nature of human psychology in relation to fear and euphoria, as well as collective thinking .  Fear and euphoria play an important role in investors psychology in general.  Fear of regret , for example, is a well-known concept that refers to the human mind anticipating regret and subsequently avoiding it. The infamous FOMO, also known as fear of missing out , is strongly dictated by fear of regret. Strengths and Shortfalls of Market Cycle Psychology Understanding the concept of market cycle psychology can be beneficial on a macro scale when determining in what strategic direction you want to take your investments. Knowing in wh...
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Fear of Regret - How Does it Affect You & How To Avoid it

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Fear of Regret In this article we cover the investor emotion known as 'Fear of Regret' . Fear of regret can lead investors into making poor investment decisions . Have you ever made an investment, only for the price (of a stock, bond, crypto, etc.) to drop and then you suddenly catch yourself unwilling to sell lower than your initial buy-in price? If that's the case then you might have suffered from Fear of Regret. Keep reading to learn more about it and how to avoid it during your future investments. Recommended Read: How To Stop Thinking About Money What is Fear of Regret? Fear of Regret is based on the ' Regret Theory ', which refers to the human psychology of anticipating regret if they were to make the wrong choice or take the wrong decision. Hence the psychological effect can impact your behavior and result in irrational decisions while investing. People hate admitting their mistakes and sadly this is one of the main drivers of Fear of Regret.  'Fear of R...
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