It's only when the markets are perceived to have exhausted themselves on the downside that they turn. Trying to prevent them from going down just merely prolongs the agony.
Sentiment: NEGATIVE
Fear tends to manifest itself much more quickly than greed, so volatile markets tend to be on the downside. In up markets, volatility tends to gradually decline.
People often panic when the markets go down and sell off their stocks - but then they aren't in the game when the markets are doing well.
During periods of extreme fear or greed, you don't have the proper balance between those two to generate market efficiency and you get extremes in behavior.
One of the reasons so many people get burned in the market is because they start buying as they see prices going up.
Markets are frequently ahead of, and often out of sync with, the economy.
If you're saving for the long run, it's actually a good thing when the market is down because the more shares you have, the more you can potentially make when markets rise. And over time - decades, not months - the markets rise more than they fall.
To pump up consumer or government demand would force interest rates up and asset prices down, possibly by enough to destroy more jobs than are created.
The market is incredibly inefficient and capable on rare occasions of being utterly dysfunctional. And people have a really hard time getting their brain around that fact. They want to believe that it's approximately efficient almost all the time, and it simply isn't true.
Markets that don't work we're going to step away from.
For us, whether the market is skewed from a bubble perspective or not really is mitigated by staying focused on what we do best.
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