Price movements are used to determine short -
term investor psychology since prices move on rumors, misinformation, and unexpected news.
Not exact matches
While long -
term market returns are driven almost exclusively by valuations, investment returns over shorter segments of the market cycle are highly dependent on
investor psychology, particularly the inclination of
investors toward speculation or risk - aversion.
Unless there's an event that will materially alter the long -
term stream of cash flows that will be delivered by companies to
investors for decades to come, what you're actually seeing is a daily dance of surface - level
investor psychology that gradually reveals or obscures the latent fundamentals below.
Even within finance, however, longer -
term investors tend to have more complex goals and short -
term investors tend to fall prey to irrational mob
psychology.
In
terms of
investor psychology, a bear market is «prolonged period of falling market prices in which the downwards decline becomes a self - fulfilling prophecy».
In
terms of
investor psychology, a bull market is «a prolonged period of rising market prices».
As I discussed yesterday,
investor psychology has more to do with long
term investment outcomes than just about anything else.