Market Psychology

What makes markets go up and down?  Nobody really knows. It’s largely a psychological phenomenon that just happens, but that doesn’t sound particularly convincing if you’re on TV, so they come up with things like “it’s the robo algorithms” or “investors are worried about the increasing costs of doing business” - both of which are literal quotes I heard last month after the market’s worst-ever (at the time of writing) one-day point loss.  Both explanations sound decently plausible, except that they’re not.

Read More