Pessimism of disbelief - best foundation for stock market recovery
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HOW far will stocks fall? That question is foremost on investors’ minds following the Straits Times Index’s decline in the past week as global stocks hit new lows.
The bad news? No one can pinpoint when stocks will turn up, especially since this bear market is so heavily sentiment-swayed. Its agonising length stems from the fact that myriad fears fuel it.
The good news? It resembles most latter-stage bear markets in one key way: It has spawned what I call the pessimism of disbelief, which is the foundation for a recovery.
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