The Cycle of Market Emotions

Sometimes an image conveys an idea more efficiently than many words. Here’s one reflecting the times we are going through.

All of us can find ourselves on this graph. This chart is a powerful reminder about the unreliability of our emotions as a guide to investment decisions.

Warren Buffett, the “Oracle 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 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 send us strong messages. It’s important to know wherever you are on the cycle of market emotions, we are here to listen and advise. If we can help in any way, please contact us anytime.