The stock market reflects human behavior as much as economics. Investor psychology shapes prices.
Fear and greed explain sudden swings. When panic spreads, markets fall sharply. Examples include dot-com bubble bursts. When optimism explodes, markets inflate bubbles.
Behavioral biases also influence decisions. Common biases include overconfidence. For example, overestimating ability to time Apple or Amazon shares. These behaviors increase risk.
Successful investors stay rational. Warren Buffett famously ignores market noise. Long-term investors avoid emotional trades. Traders use stop-losses.
Market psychology explains bubbles and crashes. By understanding it, you avoid panic selling.
In summary, emotions move prices. Whether investing in Coca-Cola and Apple for viper energy forecast the long run, success relies on emotional strength.
