Investing in the Real World

Investors interpretation of events is usually biased by their emotional reaction to whatever is going on at the moment. Fear makes it hard to remain optimistic about holdings whose prices are plummeting, just as envy makes it difficult to refrain from buying assets that everyone else is enjoying. Owning confidence is one of the key emotions and i attribute a lot of the market's recent volatility to a swing from too much of it a short while ago to too little more recently.