October 1, 2007
Investing in times of uncertainty
Markets move in cycles. Not every market is the same day after day. Opportunities exist but in small quantities. In times of uncertainty, opportunities are even less. We all invest in conditions where uncertainty is the norm. Probabilities are the only known factors to decide the likelihood of success of an investment. But real uncertainties occur when factors outside the technical aspects causing the markets to behave erratically. This comes from news, economic or corporate that are extraordinary, that influences the markets where technical aspects are greatly affected. News such as 9/11, subprime cash crunch, or corporate fraud at high profile companies. Economic and corporate news are drivers of market action, bombarding constantly causing emotional and psychological stress in traders and investors. This stress, in effect, causes them to act unpredictably.The most uncertain periods in the markets happen when the cycles are in the midst of changing, namely, expansion to contraction and contraction to expansion. In the bull market, investors become more and more euphoric with incredible gains until their emotions blind their judgment. Once the market acts up with outside factors such as fundamental news, the market begins to sway easily from one side to the other. This is […]
Full Article At: KnowHow-Now.com Articles
