Behavioral Economics

Why is it that we seem to make all of the wrong investment moves at exactly the wrong times? You know, buying a stock when it is highly priced and then selling it when the stock market is low. This sale near the market’s bottom ‘locks in’ our loss. Then, of course, we go back in and buy the stock back after the market has risen again. -Buy high, sell low. Ah, er, oops. We’ve done precisely just the opposite of what we really want to do which is -Buy low, sell high.
Does this make any sense? ‘No. Of course not’, you wisely answer. Then why do so many investors do just that?
Stay tuned…


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