The stock market is so up and down it is bound to make any exchange traded fund (ETF) investor an emotional wreck. How can you prevent your emotions from consuming you and your portfolio?
The stock market tanked last year and the economy tanked along with it. Just when things looked like the worst case scenario, the market rallied and turned around. Then in June, the rally stalled out. Mr. Barry Arnold, head of the counseling service and editor of the advisory, tells us just why the market turned up when it ought to have turned down.
The Daily Buy-Sell Advisor reports that after the March lows, a chain of events occurred to indicate that heightened emotions were driving the economy. Chrysler went bankrupt and General Motors followed close behind. Banks and many non-financial companies were raising more capital, and the U.S. dollar was losing its grip and yields on Treasury securities were jumping higher with the yield curve getting dramatically steeper.
Wall Street was depressed and Main Street was gloomy bit the markets ran in the opposite direction of the investor sentiment. Says Arnold, “Emotions, especially at turning points, are a major driving force in bull and bear markets.”