Well today the Australian Stockmarket is expected to open significantly down, following the bludgeoning of Wall Street during Friday’s trade.
There is principle for making money on the Stockmarket that a lot people seem to ignore. It’s pretty simple. Here it is:
A significant number of people ignore this principle. Why? Well when the market in rising and people are making money, that should be the time to sell, but instead because confidence is high, everyone pours money into the market.
On days like today when its all doom and gloom, the people who poured money into the market when it was high, now panic and sell. So what they do effectively is
This doesn’t make a lot of financial sense.
Now I am not a licensed financial planner so this blog doesn’t constitute financial advice. But I just felt the need to state an obvious principle.
Hope this helps