If last week’s stock performance was a “meltdown,” then Monday saw an “explosion” that erased half of last week’s losses as measured by the S&P 500 index. With Canadian markets closed on Monday, it will be interesting to see how they react in today’s opening.
For some reason, the 11.6% recovery in the S&P 500 has not generated much excitement. Even if the rest of this week sees stocks prices fully recover from last week’s losses, it seems that many investors will still feel the stinging pain of loss.
We’re wired to feel losses more strongly than gains. Our instincts often do not serve us very well when it comes to making investment decisions. We’re prone to being overly confident during good times and overly fearful during bad times like we’ve had lately.
Do you really believe that our financial system and our way of life will crumble away? It’s time to tune out the hysterical ranting on pseudo-news channels and think for ourselves.