October 30, 2014
The summer stock market doldrums have morphed into a high octane volatile zig-zag. So I ask you – what is new? Haven’t we been here before? The trouble is that we just haven’t had a serious market correction since July-August 2011 and many moons before that. We have forgotten that markets go down and up, but deep in the recesses of our minds, we remember the pain of the deep market decline of 2008-2009. That is why recent headlines have scared us.
Readers who have followed my articles over the years may recall my comments about “the big mistake.” It is the sudden, emotional unobjective reaction to unexpected market volatility and the knee-jerk decision to sell into a down market thus turning a decline into a loss. It is a naturally human “buy-high, sell-low” pattern that unfortunately repeats itself in the minds of many investors.