Personal Finance

Dr. Doug Hirschhorn’s Market Psychology Tips


What to look for in the Market’s Psychology:

Schizophrenic Sectors and/or stocks

  • Over Buying
  • Over Selling
  • Trending up or down
  • Rang Bound
  • Anything that is performing dramatically different than it has historically and not for any solid fundamental reason

Media Mind Games

  • Pay close attention to what stories are getting particular attention from the media (print and television)
  • How are these stories impacting or not impacting those sectors or indexes
  • Common factor going on right now is long-term sentiment is negative, but the markets are acting flat to positive

Investors’ Psychological Traps

  • Hoping, Wishing or Praying your investment work or come back
  • Fear of missing out
  • Over trading
  • Under trading
  • Fear of re-injury (afraid to participate because you don’t want to lose more money in the market)
  • Greedy behaviors of holding your winners too long because you want to make back the money as quickly as you lost it
  • Trying to be perfect in your entry levels – i.e. trying to buy bottoms….

Have a question for Doug? Use the form below to submit your question, which could be used on Thursday's Town Hall airing on Power Lunch at noon, ET.