Volatility and Emotions

Jul 12 13:07 2019 Print This Article

This is part of a client letter I wrote when running MurphyMorris Money Management about 20 years ago.  The message is the same today.  Market volatility has an emotional cost.  It causes investors to make irrational decisions that are usually based on either fear or greed.  Volatility also carries a steeper financial cost than most realize.  Consider the two investments in Table A below.  The one on the left (Boring Investment) is a dull, boring, plodding investment.  It never hits a home run, but never strikes out either.  The investment on the right (Exciting Investment) has lots of sizzle and excitement.  It takes your breath away in both directions.

Continue reading "Volatility and Emotions" »

Read More

About Article Author

Stockcharts.com

StockCharts.com was founded in 1999 by Chip Anderson, a 10-year veteran of Microsoft. StockCharts.com is a website that provides online investors with high-quality financial charts for making better investing decisions. StockCharts.com is focused on Technical Analysis - the study of price history via charts. They provide award-winning analysis tools, market commentary from respected analysts like John Murphy and Martin Pring, and a huge collection of educational resources that can help anyone become a better, more informed investor.

  Categories:

Related Items

Schedule for Week of October 20, 2019

The key reports this week are September New and Existing Home sales.For manufacturing, the Richmond and Kansas City Fed manufacturing surveys will be released this week.----- Monday, Oct 21st ----- No major economic releases scheduled.----- Tuesday, Oct 22nd ----- 10:00 AM: Existing Home Sales for S ...

Book Bits | 19 October 2019

● How Charts Lie: Getting Smarter about Visual Information By Alberto CairoReview via The Economist His book could not be more timely. Charts and maps pepper traditional and social media more than ever, but there have been few attempts to improve what Mr Cairo calls the “graphicacy” of their ...

October 18, 2019

Great news! FAIR Canada, that superannuation scheme for surplus regulatory staff is on its last legs: The primary advocacy group for Canadian investors is facing extinction after it has returned a $2-million grant, unable to raise matching funds. The Canadian Foundation for the Advancement of Inves ...

Germany: Back to “Sick Man of Europe”?

Germany’s economy is on the brink of recession. We expect a gradual recovery through the next year, but this is dependent on easing trade tensions. ...

Decoding the Fed

In less than 12 months we have seen the Fed raise rates, cut rates, shrink its balance sheet, expand its balance sheet, inject liquidity, withdraw liquidity, and do who knows what else behind the scenes. Either Fed officials are confused or we are at some kind of economic turning point. Or possibly ...

Clips From Today’s Halftime Report

Why Fundstrat’s managing partner says 2019 is the best year in 20 years for markets from CNBC. ...The post Clips From Today’s Halftime Report appeared first on The Reformed Broker. ...

Spinoffs, Takeovers and Special Situations Hotline – Friday, October 18, 2019

FITBIT INC., $3.86, symbol FIT on New York, makes and sells wearable devices that track the user’s fitness, including daily steps taken and calories burned, as well as their sleep duration and quality. Fitbit first sold shares to the public at $20 each and began trading on New York on June 18, 20 ...