Here's the lesson: No matter how bulletproof any particular stock may seem, it isn't. Invest accordingly and don't put too much of your money in any one stock or sector. Discounted offers are only available to new members.
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What Is a Rebound in Finance? In financial terms, a rebound means a recovery from prior negative activity. For a security, a rebound means that it has moved higher from a lower price. S dollars — also guilt-free and patriotic in a sense.
Recency bias: when someone believes recent events must continue in the future — also known as the hot hand fallacy — is the most detrimental fallacy by far. Maybe it was bad timing or maybe it was FOMO: the fear of missing out. Your friends, family, coworkers were bragging about making 10 to 20 percent in a couple of months, so you had to get in on the action.
Us humans hate missing out on gains. In investing, however, you also have to embrace JOMO: the joy of missing out, to save yourself from joining in speculative bubbles at their peak. There were warnings from many experts as to why they were dangerous and even a quick Google search revealed the risks.
When deciding whether to invest in any financial product, do an hour of research into how they work, and most importantly, what can — and will at some stage — go wrong. In any market, you have winners and you have losers, but you would expect the smartest people in the finance industry to successfully predict the stock market crash and come out unscathed.
But the crash proved that, sometimes, even the smart guy gets it wrong. The best decision I ever made was to get interested in economics, money management, and markets.
The views represented in this commentary are those of its author and do not reflect the opinion of Traders Magazine, Markets Media Group or its staff. Traders Magazine welcomes reader feedback on this column and on all issues relevant to the institutional trading community.
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