Be greedy when others are fearful, Warren Buffett said. Here’s why this is very hard to do
Evolutionary psychology and behavioural biases are common enemies of every stock portfolio. Despite well-established wisdom that you shouldn’t attempt to time the market, investors almost always jump in too late. Here’s how you can avoid making the same mistake.
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Yong Jun Yuan
GOOGLE searches for the term “S&P 500” spiked in March 2020, roughly around the time the index was collapsing.
Whether Internet users were trying to calculate how much they had lost or figure out the best time to enter the market, it is impossible to tell. But there certainly was a rush to open stock trading accounts at the time, and anecdotal evidence shows plenty of investors made their first trades that year.
The excitement was understandable. From peak to trough, the S&P 500 fell 33.9 per cent in the first few months of 2020. A buying opportunity had emerged, unseen for more than a decade.
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