Worth a Thousand Words: The Cycle of Market EmotionsSubmitted by Bernhardt Wealth Management on March 23rd, 2020
Sometimes an image can convey an idea more quickly and efficiently than many words of explanation. Here’s one that seems to resonate strongly with the times we are going through right now.
Certainly all of us can find ourselves somewhere on this graph. But even more importantly, this image is a powerful reminder about the fallibility of our emotions as a guide to investment decisions.
Warren Buffett, the “Sage of Omaha,” said in his famous op-ed of October 16, 2008, “Be fearful when others are greedy, and be greedy when others are fearful.” In the midst of a financial crisis, he announced that he was actively buying American stocks. The market would fall another 16% before it turned up, starting the longest-running bull market in history, but Buffett remained patient and committed to his strategy, and his record speaks for itself.
In times like these, our emotions can certainly send us some very strong messages. It’s important for you to know that wherever you are on the cycle of market emotions, we are here to listen and advise. If we can help in any way, please get in touch.