Sophistication in Sentiments: The Stock Market Emotions Chart Explained

stock market emotions chart

Introduction

Investing in the stock market can be a daunting task, especially for those unfamiliar with its fundamental rules. However, the path becomes much more manageable once you grasp these basics and adhere to them while avoiding speculative behaviour. Success boils down to discipline and patience, combined with a deep understanding of the fundamental components of mass psychology. If you complement this knowledge with technical analysis, you’ll refine your skills even further.

One of the most critical aspects of stock market investing is comprehending the emotions driving market movements. Enter the stock market emotions chart—a tool designed to help investors navigate the complex interplay of emotions throughout different market cycles.

The Essence of a Stock Market Emotions Chart

A stock market emotions chart visualises how shifting emotions and sentiments among market participants can influence the progression of a market cycle. These charts depict the dominant psychology at each stage, from widespread pessimism during bear markets to exuberance amid bullish frenzies. The horizontal axis typically represents the extent of market valuation relative to fundamental value, ranging from oversold to overbought extremes. The vertical axis charts the prevailing emotional state, ranging from fear or despair to hope or gratitude.

During periods of optimism, sentiments like denial, hope, and euphoria tend to take hold as prices rise beyond reasonable levels. Conversely, downturns breed emotions like anxiety, fear, and panic on the way down. These predictable progressions from one emotional plateau to another provide contrarian signals.

The Inner Workings of a Stock Market Emotions Chart

Understanding investor emotions is crucial, as greed and fear create self-fulfilling cycles that influence prices substantially over the long run. A stock market emotions chart monitors these primal emotions through distinct halves representing optimism versus uncertainty.

BNB chart Anxiety chart Wall Street cheat sheet

The fear area depicts periods bearing angst, with skittish investors hurriedly exiting equity positions. Major sell-offs frequently coincide with capitulation to the downside, as pessimism breeds even more profound doubts. Monitoring sell-side pressure through expanded volumes and bearish sentiment gauges helps identify points of maximum distress.

Meanwhile, greed involves euphoria and exuberance as excesses emerge on buoyant uptrends—extended rallies birth overconfidence, with investors rationalising lofty valuations driven more by emotional contagion than fundamentals. Distribution events surface as more realistic appraisals of underlying strength take hold.

Benefits of Using Stock Market Emotions Chart

Here are some key benefits of using stock market emotion charts:

  • It helps tune out noise and remain objective. By analysing how sentiments evolve, investors can avoid panicking during sharp downturns or exuberance in huge rallies.
  • Identifies trend changes earlier. Emotional extremes illustrated on the chart often signal market tops and bottoms before prices fully reverse. This gives a timely heads-up on potential trend changes.
  • Prevents chasing momentum. The chart depicts when buying interest switches from fear to greed. This helps traders avoid euphoric, late-stage positions with expensive entries.
  • Reduces behavioural biases. Visualising how biases like overconfidence distort thinking at peaks encourages more rational decision-making aligned with fundamentals.
  • Promotes contrarian thinking. Recognising when prevailing views have become too optimistic or pessimistic inspires trades, countering the herd for superior risk adjustment.
  • Enhances portfolio discipline. Using sentiment as an additional factor fosters systematic processes for rebalancing exposures rather than panicked reactions to short-term swings.
  • Highlights multi-year cycles. Charts illustrate recurring patterns of emotion during the bull and bear eras, helping form realistic long-term expectations.

Common Emotions That Drive Market Movements

In addition to fear, greed, optimism, pessimism, and panic, several other emotions significantly influence market movements. These include hope, regret, pride, and overconfidence.

Hope is a powerful emotion that can lead investors to hold onto losing positions for too long, believing that the market will eventually turn around. This can result in significant losses if the market continues to decline.

Regret, on the other hand, can cause investors to sell winning positions too early out of fear that they will lose their gains. This can prevent them from fully capitalising on successful investments.

Pride and overconfidence can also be detrimental. Investors who are overly confident in their abilities may take on too much risk, leading to potential losses. They may also ignore warning signs and fail to adequately diversify their portfolios, putting them at greater risk of significant failure.

Finally, the herd mentality, an individual’s tendency to follow a larger group’s actions, can also drive market movements. This can lead to market bubbles and crashes as investors collectively rush to buy or sell.

Understanding these emotions and how they influence investment decisions is crucial for anyone in the stock market. By recognising and managing these emotions, investors can make more rational and successful investment decisions.

In conclusion, the stock market emotion chart is an indispensable tool for any investor navigating the intricate and emotionally charged realm of stock market investing. It offers invaluable insights into the emotional dynamics that significantly influence market movements. By understanding and leveraging these dynamics, investors can enhance their chances of success in the volatile world of stock market investing.

Other Articles of Inteerst

The Permabear Doomster's Paradox

The Permabear Doomster’s Paradox: Blending Prudence with Market Savvy

Navigating the Abyss: The Permabear Doomster’s Creed In the shadowy realms of market analysis, there lurks a breed of thinkers ...
Stock Market Manipulation

Illuminating the Shadows of Stock Market Manipulation

Navigating the Pitfalls of Stock Market Manipulation: A Treatise for the Discerning Investor In finance, where fortunes are forged and ...
Perception Manipulation in Trading: Cutting Through the Psychological Fog

Perception Manipulation in Trading: Cutting Through the Psychological Fog

Revitalizing Investment Insights: The Power of Perception In the ever-evolving landscape of investment, perception is not just a buzzword; it’s ...
contrarianism definition

Embracing Contrarianism: The Path to Innovative Thinking

In an era where information overflows, and opinions are a dime a dozen, the contrarian stance stands out as a ...
reasons why ai is bad

Unmasking the Dark Side of Artificial Intelligence

Artificial Intelligence (AI) is undeniably transforming the world as we know it. AI is becoming an integral part of our ...
Banksters Band: Exploiting the Disadvantaged

Banksters Band: Exploiting the Disadvantaged

Banksters Band: Exploiting the Disadvantaged, Fostering the Wealth of the Privileged The role of the Federal Reserve in economic stabilisation ...
Who Makes Blue Gas

The Power Producers: Discovering Who Makes Blue Gas?

What is blue gas, and who makes it? Blue hydrogen, often referred to as blue gas, has become a focal ...
investment pyramid

Investment Pyramid: A Chic Strategy in the Modern Investment Era

An investment pyramid, or risk pyramid, functions as a tactical roadmap for portfolio distribution, considering the varying risk levels tied ...

(no title)

[xyz-ips snippet=”STOCK”] ...

MU Table pdf preview

[dearpdf id=”1209″][/dearpdf] ...

The Artful Approach to Winning the Stock Market Game

how to win stock market game

Mastering the Art: How to Win the Stock Market Game

We delved into this subject a few years back, using a chart from the now-obsolete company CMGI. Therefore, we thought it apt to present a fresh update. In this instance, we’re using the NASDAQ. The chart below visually represents the thought process the average investor undergoes when embarking on any investment. This principle applies to all stocks, indices, or markets. Hence, GOOG, AAPL, WMT, IBM, NTES, SOHU, MSFT, etc., all adhere to the same rules.

A majority of investors plunge into the markets without adequate preparation. They falsely believe they’re equipped to tackle the stock market after reading a few books, tuning into CNBC pundits, and following a handful of alleged experts. The market is a formidable beast boasting a win ratio exceeding 90%. Only 10% of investors can consistently claim to secure gains.

How to Win the Stock Market Game Tip 1

Regrettably, the everyday person, regardless of their expertise, often falls prey to the harsh realities of investing. This is largely due to their propensity to act impulsively, failing to think things through. Sadly, emotions often dictate their investment decisions, a disastrous approach that clashes with the logical world of investing.

Predictably, those who let emotions steer their investments are destined to encounter financial setbacks. Thus, it’s crucial to disentangle ourselves from emotions and banish them from our investment decisions. In the realm of investing, emotions are an unwelcome distraction, a barrier that needs immediate removal.

The Solution Is Simple

The solution to this quandary is surprisingly simple, yet its simplicity masks its real challenge. As previously highlighted, emotions are the nemesis of the discerning investor and must be dismissed outright. The adage “act now, think later” seems appropriate here, as emotions have no place in investment decisions. Winning in this domain demands that we counter the irrational impulses of our emotions. Any deviation from this norm is a risk that must be avoided at all costs, as euphoria and panic are such deviations that can mislead one.

Bear in mind, dear reader, that the road to success in investing demands discipline and rationality. Emotions are fleeting distractions that must be conquered to reach our investment goals.

The Painful Cycle

This stock is stagnant, showing minimal movement, and its fundamentals are weak. Those who jumped in are simply lucky. This is a false breakout. This stock is poised to plummet to new lows. Incredibly, the stock continues to rise. Earnings are dismal, long-term fundamentals are not promising, and the technical outlook leaves much to be desired. I’m relieved I abstained from buying; I knew it would plummet. Instead of acknowledging the stock is simply letting off some steam and gathering momentum for the next upward movement, the mass mindset only sees what it wants to see. Hold on, what’s happening here? The market was predicted to crash. Perhaps my decision not to buy was a mistake. I was smart to wait until conditions improved before investing; it seems like the markets are ready to soar. What’s happening? Why is the market falling? It’s just a mild pullback; I won’t be tricked by this game again. There we go; I knew it was bound to rebound. I should have invested more into the market. It’s falling again. Opportunity is knocking; it’s time to load up. The market faces a severe pullback following a dose of bad news. If you panic at this point, fear will consume you. Darn it; the market is lifeless. I’m exiting the stock market. The market is slowly bottoming out. Once this phase concludes, a new uptrend will commence. How to Win the Stock

Market Game: Insider Tip 2

In investing, maintaining rationality and analytical thinking is crucial, rather than letting emotions dictate your decisions. Emotions like fear and greed can prompt investors to make irrational calls, leading to substantial losses.

Perceptions and assumptions significantly impact how we interpret information and make decisions, with emotions often muddying these perceptions. Hence, learning to manage your emotions is key to becoming a successful investor.

Attempting to pinpoint the exact peak or trough of a market is mostly a futile exercise. It’s more productive to focus on discerning the subtle signs indicating when the market is peaking or bottoming out. Once you’ve identified these signs, you can establish a position that aligns with your analysis, even if it contradicts the popular sentiment.

Ultimately, successful investing requires a degree of detachment and the capacity to make rational decisions amid emotional chaos. Investors can boost their odds of market success by focusing on the facts, reigning in emotions, and making decisions based on objective analysis.

Intelligent Investment Tactics: How to Win the Stock Market Game

Dollar-Cost Averaging:

Dollar-cost averaging is an investment technique where a consistent amount of money is invested at regular intervals, irrespective of the current stock prices. The primary aim of dollar-cost averaging is to lessen the impact of market volatility and curb the risk of making impulsive investment decisions based on short-term market swings. Here’s how it functions:

  1. Regular Investments: With dollar-cost averaging, you invest a consistent sum of money at regular intervals, such as monthly or quarterly. This method ensures that you continue investing whether stock prices are high or low.

  2. Acquire More When Prices are Low: During market downturns, your fixed investment sum will enable you to buy more shares or units of an investment because prices are lower. This can potentially lead to a larger ownership stake in the investment.

  3. Acquire Less When Prices are High: Conversely, when the market is thriving and prices are high, your fixed investment sum will only buy fewer shares or units. This can help prevent you from investing a large amount at the peak of a market cycle.

  4. Cost Averaging: Over time, as you continue to invest regularly, the varying prices at which you buy shares or units will average out. This can potentially result in a lower average cost per share or unit compared to trying to time the market and make all your investments at once.

  5. Emotional Discipline: Dollar-cost averaging promotes disciplined investing and can help you avoid making impulsive decisions based on short-term market swings. By adhering to a predetermined investment plan, you are less likely to be swayed by market noise or emotions.

It’s crucial to remember that dollar-cost averaging does not assure profits or safeguard against losses. Markets can still undergo downturns, and the value of investments can fluctuate. Additionally, transaction costs and fees associated with regular investments should be considered.

Dollar-cost averaging is a long-term strategy that works best when you have a clear investment goal and a suitable investment vehicle. It may be suitable for individuals who prefer a systematic and disciplined approach to investing and who are willing to invest for an extended period.

As with any investment strategy, it’s recommended to consult with a financial advisor or conduct thorough research before implementing dollar-cost averaging or any other investment approach.

Fundamental Analysis

When conducting fundamental analysis for investment purposes, you evaluate various factors to assess the financial health, competitive position, and growth prospects of companies. Here are some key steps and considerations involved in fundamental analysis:

Financial Statements Analysis: Examine the company’s financial statements, including the income, balance, and cash flow statements. Analyze key financial ratios, such as profitability ratios (e.g., gross margin, net profit margin), liquidity ratios (e.g., current ratio, quick ratio), and leverage ratios (e.g., debt-to-equity ratio). Look for trends, patterns, and any red flags that may affect the company’s financial health.

Industry and Market Analysis: Assess the company’s industry and market dynamics. Understand the competitive landscape, market trends, and potential risks or opportunities. Consider factors like market size, growth rate, barriers to entry, and the company’s positioning within the industry.

Management and Corporate Governance: Evaluate the management team’s experience, track record, and strategic vision. Assess the company’s corporate governance practices, including the board of directors’ composition and independence. Look for transparency, ethical practices, and alignment of management’s interests with shareholders.

Growth Prospects and Competitive Advantage: Analyze the company’s growth prospects and competitive advantage. Consider factors such as product differentiation, intellectual property, market share, and expansion plans. Assess the company’s ability to generate sustainable revenue growth and maintain a competitive edge over its rivals.

Risk Assessment: Identify and assess potential risks that could impact the company’s performance. These risks can include economic factors, regulatory changes, technological disruptions, industry-specific risks, and company-specific risks. Evaluate how well the company is positioned to manage and mitigate these risks.

Valuation: Determine the company’s intrinsic value by considering various valuation methods, such as price-to-earnings ratio, price-to-sales ratio, discounted cash flow analysis, or comparable company analysis. Compare the company’s valuation to its peers and the broader market to assess its investment attractiveness.

Qualitative Factors: Consider qualitative factors influencing the company’s prospects, such as brand reputation, customer loyalty, innovation capabilities, and corporate culture. These intangible factors can provide insights into the company’s long-term sustainability and competitive advantage.

It’s important to note that fundamental analysis requires a combination of financial expertise, industry knowledge, and research skills. Investors often use a variety of quantitative analysis (numbers-based) and qualitative analysis (non-financial factors) to form a comprehensive view of a company’s investment potential.

While fundamental analysis provides valuable insights, it’s crucial to remember that investing involves risks, and no analysis can guarantee investment success. It’s advisable to consult with a financial advisor or conduct thorough research before making investment decisions.

Other articles of interest

The Permabear Doomster's Paradox

The Permabear Doomster’s Paradox: Blending Prudence with Market Savvy

Navigating the Abyss: The Permabear Doomster’s Creed In the shadowy realms of market analysis, there lurks a breed of thinkers ...
Stock Market Manipulation

Illuminating the Shadows of Stock Market Manipulation

Navigating the Pitfalls of Stock Market Manipulation: A Treatise for the Discerning Investor In finance, where fortunes are forged and ...
Perception Manipulation in Trading: Cutting Through the Psychological Fog

Perception Manipulation in Trading: Cutting Through the Psychological Fog

Revitalizing Investment Insights: The Power of Perception In the ever-evolving landscape of investment, perception is not just a buzzword; it’s ...
contrarianism definition

Embracing Contrarianism: The Path to Innovative Thinking

In an era where information overflows, and opinions are a dime a dozen, the contrarian stance stands out as a ...
reasons why ai is bad

Unmasking the Dark Side of Artificial Intelligence

Artificial Intelligence (AI) is undeniably transforming the world as we know it. AI is becoming an integral part of our ...
Banksters Band: Exploiting the Disadvantaged

Banksters Band: Exploiting the Disadvantaged

Banksters Band: Exploiting the Disadvantaged, Fostering the Wealth of the Privileged The role of the Federal Reserve in economic stabilisation ...
Who Makes Blue Gas

The Power Producers: Discovering Who Makes Blue Gas?

What is blue gas, and who makes it? Blue hydrogen, often referred to as blue gas, has become a focal ...
investment pyramid

Investment Pyramid: A Chic Strategy in the Modern Investment Era

An investment pyramid, or risk pyramid, functions as a tactical roadmap for portfolio distribution, considering the varying risk levels tied ...

(no title)

[xyz-ips snippet=”STOCK”] ...

MU Table pdf preview

[dearpdf id=”1209″][/dearpdf] ...

The Permabear Predicament: A Ballet of Bearish Beliefs

permabear

Being a permabear is akin to a unique form of folly that even countless harsh lessons fail to rectify. It seems permabears harbour a desire for financial ruin, as this is the only plausible explanation for such myopic thinking. A glance at any long-term financial chart will conclusively demonstrate that maintaining a permabear outlook is a losing strategy. No historical chart can validate the notion that a consistently bearish stance yields long-term profits.

Regardless of the trend line you choose, the above 100-year chart of the Dow Jones Industrial Average unequivocally shows that permabears are misguided in their investment approach.

The remedy is straightforward.

Concentrate on the basic elements that help identify the trend—elements like mass sentiment and extreme patterns (technical analysis) visible on the charts. News is not a critical factor; in fact, it holds less significance than toilet paper; at least the latter serves a practical purpose, which cannot be said about the news.

Anyone who promotes succumbing to fear should be metaphorically expelled from your life and mind; fear never yields profits; only those who peddle fear profit, while the purchasers lose everything.

Marc Faber: The Hazard of Being A Permabear

This individual has been forecasting the most significant market crash since the beginning of this bull market (2009), but the only thing that has crashed so far is his crash predictions. He might have a promising career as a science fiction author, given his penchant for devising scenarios with a minuscule chance of actualization.

During a heated debate, a frustrated nation challenged Faber’s consistent bearish forecasts since 2012. Nations pointed out that those who invested in stocks during that period realised substantial gains, casting doubt on Faber’s precision. Faber defended his predictions, citing a 2012 correction as proof. He remained steadfast, believing that his warnings would eventually be vindicated. Faber shrugged off the criticism, stating he is no stranger to detractors. The confrontation underscored the divergent views on market trends, leaving the question of who will be proven correct.

“I assure you that when all is said and done, people will appreciate me warning them not to invest all their money in stocks,” Faber added. “I’m accustomed to people like you who constantly criticise me.”

“You’re accusing me of being incorrect? I find it amusing,” Faber concluded. –CNBC

Here, he predicted a significant recession in 2018

As it turns out, the only recession was in his predictions—the only thing that has been in a bear market for now. Therefore, it could be profitable if you are a permabear in his ability to predict market direction.

Then, he goes on to state the party will end in 2018. Random Thoughts on Being a Permabear.

Firstly, we hope most of our subscribers begin to understand that giving in to fear is perilous. Life and investing should not be stressful; stress is something that every tactical investor should avoid. Moreover, remember, stress is a matter of perception; change the perception, and one can transition from being stressed to being calm.

Experts often argue that investing is difficult and that mastering this art takes a lifetime. Remember that investing is an art, not a science, and art is meant to be enjoyed. So are the masses starting to jump on the bandwagon after this strong turnaround? The obvious answer would be yes. The not-so-obvious answer would be no. Continue reading. At least in the first half of 2019, the not-so-obvious answer would be the correct choice. The masses are still anxious, and until they start to celebrate in the streets, every strong correction should be viewed from a bullish perspective.

The Current Bull: Unlike Any Other Bull Market

This bull market is unique; before 2009, one could have relied on extensive technical studies to more or less predict the top of a market with a margin of error of a few months; after 2009, the game plan changed, and 99% of these traders and experts failed to factor this into the equation. Technical analysis as a standalone tool would not work as well as before 2009 and, in many cases, would lead to an incorrect conclusion.

In short, there are still too many pessimists (experts, average Joes, and everyone in between), and until they start to embrace this market, most pullbacks, mild to wild, will be mistakenly identified as the big ones.

The results are self-evident; most of our holdings were in the red during the pullback, but now they are in the black, proving that one should buy when there’s panic in the streets. It’s a catchy and easy phrase to utter but very challenging to implement because the masses will choose to be pushed when faced with a push or shove situation.

Stock Market Update March 2023

In times of crisis, such as the current coronavirus pandemic, it can be prudent to nibble at stocks with a long-term perspective. Instead of investing all your funds at once, consider investing in smaller increments to average your entry price and protect against stock market dips.

At the Tactical Investor, we focus on longer-term plays that typically span several months. However, in times of crisis like these, we’re seeing a surge in the potential for huge profits, so our time frames have lengthened accordingly. While the short-term market may seem like a massacre, it’s also a hotbed for exceptional opportunities that can herald the next bull market.

Investing is easy when everything appears to be going well, but unfortunately, that’s when most assets are already overpriced. When times seem grim, that’s precisely when the best bargains can be found. So, consider examining the market more closely during these volatile times, and you may uncover some hidden treasures.

FAQ

Q: What is a permabear? A permabear refers to an investor who consistently maintains a bearish outlook on the market, predicting downturns and advocating for a defensive or negative investment strategy.

Q: Why is being a permabear criticised? A: Being a permabear is often criticised because historical data shows that the stock market tends to rise over the long term. Critics argue that Permabears misses out on potential gains by constantly expecting market declines and failing to take advantage of positive trends.

Q: What evidence is provided against being a permabear? The text suggests that examining long-term charts and trends reveals that being a permabear does not pay off. It emphasises that stock market charts demonstrate consistent upward movement, and taking a bearish stance is unlikely to yield positive results over time.

Q: What factors should be considered in determining investment trends? A: The text suggests focusing on mass sentiment, extreme patterns (through technical analysis), and long-term chart trends. It argues that news is less relevant and that fear-based decision-making is discouraged, as fear rarely leads to favourable outcomes.

Q: Who is Marc Faber, and what are his views on market predictions? Marc Faber is mentioned as someone who has consistently predicted significant market crashes, but these predictions have not materialised. The text implies that Faber’s accuracy has been questioned, with critics suggesting his scenarios have a low probability of occurring.

Q: How did Marc Faber defend his bearish predictions? In response to criticism, Faber defended his predictions by citing a 2012 correction as evidence of his accuracy. He expressed confidence that his warnings would eventually be appreciated and dismissed the criticism, stating that he is accustomed to facing detractors.

Q: What is the perspective on investing during times of crisis? A: During times of crisis, the text suggests that it can be wise to take a long-term perspective and consider investing in smaller increments to average the entry price. It highlights that volatile times often present exceptional profit opportunities and recommends exploring the market during such periods.

Q: What is the suggested approach to investing during market downturns? A: The text advises considering investments when the market appears bleak, as it is often when the best deals can be found. It encourages investors to look for hidden gems and emphasises that the short-term market turmoil may present opportunities for substantial gains in the long run.

Other Articles of Interest

The Permabear Doomster's Paradox

The Permabear Doomster’s Paradox: Blending Prudence with Market Savvy

Navigating the Abyss: The Permabear Doomster’s Creed In the shadowy realms of market analysis, there lurks a breed of thinkers ...
Stock Market Manipulation

Illuminating the Shadows of Stock Market Manipulation

Navigating the Pitfalls of Stock Market Manipulation: A Treatise for the Discerning Investor In finance, where fortunes are forged and ...
Perception Manipulation in Trading: Cutting Through the Psychological Fog

Perception Manipulation in Trading: Cutting Through the Psychological Fog

Revitalizing Investment Insights: The Power of Perception In the ever-evolving landscape of investment, perception is not just a buzzword; it’s ...
contrarianism definition

Embracing Contrarianism: The Path to Innovative Thinking

In an era where information overflows, and opinions are a dime a dozen, the contrarian stance stands out as a ...
reasons why ai is bad

Unmasking the Dark Side of Artificial Intelligence

Artificial Intelligence (AI) is undeniably transforming the world as we know it. AI is becoming an integral part of our ...
Banksters Band: Exploiting the Disadvantaged

Banksters Band: Exploiting the Disadvantaged

Banksters Band: Exploiting the Disadvantaged, Fostering the Wealth of the Privileged The role of the Federal Reserve in economic stabilisation ...
Who Makes Blue Gas

The Power Producers: Discovering Who Makes Blue Gas?

What is blue gas, and who makes it? Blue hydrogen, often referred to as blue gas, has become a focal ...
investment pyramid

Investment Pyramid: A Chic Strategy in the Modern Investment Era

An investment pyramid, or risk pyramid, functions as a tactical roadmap for portfolio distribution, considering the varying risk levels tied ...

(no title)

[xyz-ips snippet=”STOCK”] ...

MU Table pdf preview

[dearpdf id=”1209″][/dearpdf] ...

Harnessing Power: The Dynamic Approach of Small Dogs Of the Dow

The Dynamic Approach of Small Dogs Of the Dow

For those new to the world of investing, the stock market can appear as a daunting labyrinth of stocks and complex investment strategies. The overwhelming volume of information and choices can easily lead to a sense of bewilderment and apprehension. Amidst this intricate landscape, it becomes crucial for beginner investors to identify a simple yet effective investment strategy that can help them gain confidence and work towards their financial objectives. One such strategy that has found favour among novice investors is the Small Dogs of the Dow strategy.

The Small Dogs of the Dow strategy streamlines the investment process by zeroing in on a select group of high dividend-yielding stocks within the Dow Jones Industrial Average (DJIA). This approach enables investors to make informed decisions without getting swamped by the multitude of options in the stock market. By adopting the Small Dogs of the Dow strategy, beginner investors can leverage a tried-and-tested method that has historically shown robust performance while also enjoying a consistent income through dividends.

So, what exactly is this strategy? The Small Dogs of the Dow strategy is a well-liked investment approach that zeroes in on the ten highest dividend-yielding firms within the Dow Jones Industrial Average (DJIA). The strategy operates on the assumption that high dividend yields indicate undervalued stocks with the potential to outshine the market. Concentrating on these high-yield stocks, the strategy seeks to pinpoint companies that are currently undervalued by the market but possess strong fundamentals and the potential for future growth. Moreover, the strategy is designed to provide investors with a steady income stream through the dividends paid by these high-yield stocks.

The Small Dogs of the Dow approach is relatively straightforward and easy to comprehend, making it an appealing choice for novice investors with limited experience in the stock market. It is also a cost-effective strategy, as it does not necessitate frequent trading or the use of intricate investment vehicles. Instead, investors can invest equal amounts of money into each of the 10 Small Dogs of the Dow stocks or utilize an ETF or mutual fund that tracks the Small Dogs of the Dow index.

Despite the risks, the strategy has historically outperformed the broader market. It can be a valuable investment approach for investors seeking a simple, income-generating approach to stock market investing. However, investors should be aware of the risks associated with this approach and should always seek advice from a financial advisor before making any investment decisions.

The Small Dogs of the Dow strategy involves investing in the highest-yielding stocks within the Dow Jones Industrial Average. A variation of this strategy, known as Small Dogs of the Dow, involves investing in the highest-yielding stocks within the Dow Jones Industrial Average that have a lower market capitalization, typically under $10 billion.

To select Small Dogs of the Dow stocks, you can follow these steps: • Identify the current Small Dogs of the Dow: You can locate the current Small Dogs of the Dow list online or by using a stock screener that allows you to sort by dividend yield and market capitalization. • Investigate each company: Once you have the list of Small Dogs of the Dow, delve into each company to understand their business, financials, competitive advantages, and growth prospects. Look for companies with a history of paying dividends and a sustainable dividend payout ratio. • Assess the risks: Consider the risks associated with each company, such as industry trends, competition, regulatory environment, and financial risks. Evaluate the potential impact of these risks on the company’s financials and dividend payouts. • Diversify your portfolio: As with any investment strategy, it is crucial to diversify your portfolio to spread out your risk. Invest in a mix of Small Dogs of the Dow stocks and other types of investments to achieve a balanced portfolio. • Monitor your investments: Regularly monitor your Small Dogs of the Dow investments to ensure they meet your investment goals and risk tolerance. Reevaluate your investments periodically and make adjustments as necessary.

One of the primary advantages of this strategy is its simplicity. It is an easy-to-understand investment strategy that does not require much time or expertise. Additionally, since the strategy focuses on high-yield dividend stocks, it can provide investors with a steady income stream.

Another advantage of this strategy is its historical performance. According to some studies, the Small Dogs of the Dow have outperformed the Dow Jones Industrial Average by an average of 2% per year over the past two decades. Investors should be aware of the risks associated with this approach, such as changes in interest rates and the financial condition of the selected equities.

This strategy is also a low-cost investment approach, as it does not require frequent trading or the use of complex investment vehicles. Instead, investors can invest equal amounts of money into each of the 10 Small Dogs of the Dow stocks or use an ETF or mutual fund that tracks the Dow index.

Potential investors have expressed interest in the “small dogs of the Dow” strategy. While this approach offers advantages in simplicity and historical returns, it is important for individuals to understand both perspectives on this and alternative options. Here are a few key points regarding risks, performance, implementation and other considerations:

  • Like all stock market investing, there are inherent risks to consider such as general market fluctuations, concentration in a small number of securities, reliance on dividend yields alone without regard for other factors, and changes in sector/industry returns that could impact portfolio results.
  • Although backtested performance has outpaced the broader Dow Jones average, past returns do not guarantee comparable future outcomes. Markets and company fundamentals shift over time. For long-term goals, flexibility and diversification are prudent.
  • Low-cost ETFs provide solid options for accessing the “small dogs” index without significant trading costs. However, individuals should understand underlying holdings, charges and fit within their preferred investment style/objectives.
  • While the premise of focusing on higher-yielding, “undervalued” Dow stocks has validity, exclusivity to any single approach fails acknowledging diversity of views. Complementary allocations afford protection against unpredictable changes.
  • Professional guidance enhances implementation, ongoing oversight and adaptation to evolving needs, market climates or preference changes over years/decades. Strict “set it and forget it” routines risk deviations.

Overall, the “small dogs” methodology carries value as one piece within a broader, comprehensively developed portfolio. But regular review of performance against alternatives, consideration of non-statistical priorities and openness to adjustments optimize prospects for each person according to their distinct outlooks and convictions. Does this help provide a balanced perspective on both risks and opportunities with this strategy? I’m happy to discuss any part of the overview further.

Other Articles of Interest

stock market emotions chart

Sophistication in Sentiments: The Stock Market Emotions Chart Explained

Introduction Investing in the stock market can be a daunting task, especially for those unfamiliar with its fundamental rules. However, ...
how to win stock market game

The Artful Approach to Winning the Stock Market Game

Mastering the Art: How to Win the Stock Market Game We delved into this subject a few years back, using ...
permabear

The Permabear Predicament: A Ballet of Bearish Beliefs

Being a permabear is akin to a unique form of folly that even countless harsh lessons fail to rectify. It ...
The Dynamic Approach of Small Dogs Of the Dow

Harnessing Power: The Dynamic Approach of Small Dogs Of the Dow

For those new to the world of investing, the stock market can appear as a daunting labyrinth of stocks and ...
Exploring the Human Mind

Psychology Unveiled: Exploring the Depths of the Human Mind

Ahoy there, fellow explorer! It is an undeniable truth that the emotions within us drive the ebb and flow of ...
hologram of investor and chart

Stock Portfolio Tracker

Live Stock Portfolio Tracker with Analytics Please scroll down and register for an account. If you use the incognito mode, ...
stock market crashes

What happens if the stock market crashes?

The stock market has been a popular investment avenue for individuals and organizations for many years. Despite its popularity, many ...
Intelligent Investing

Achieving Financial Goals with Intelligent Investing Strategies

Intelligent investing strategies seek to minimize risk and maximize returns through the use of thoughtful, data-driven approaches. These strategies aim ...
uranium futures price

Uranium Futures price chart

Uranium futures price chart: Is Uranium Ready To Rally By any estimate, the uranium market is trading in the extremely ...
Stock Market 2018 Graph

Stock market performance 2019

Stock Market 2018 Graph: The trend is your friend Stock market performance 2019: Financial experts continue to state that the ...
quantitative easing definition

Quantitative Easing Definition

Forever Quantitative Easing: Is it here to stay? The term forever QE has just started to come into play recently, ...
hologram of investor and chart

Stock Market Update

Stock Market Watch is our most popular and oldest stock market update service. As numerous upgrades and 2 upgrades are ...
Stock Market Quotes and Sayings

Stock Market Quotes and Sayings

Warren Buffett usually has produced a lot of great stock market quotes in regards to the discipline of investing; his ...
US Dow Jones Stock Outlook

US Dow Jones Outlook

US Dow Jones Stock Market outlook Huge amounts of money have abandoned the marketplace, suggesting the audience is panicking at ...

Dow Jones predictions: Next Target Dow 30k?

Dow 22K Predicted In July 2017; Next Target Dow 30k? Dow Jones predictions: The Dow appears to have broken through ...
US market live data

US market live data chart and commentaries

US market live trend Through a difficult patch, and this is not something new; however, when it occurs, it seems ...
Loading...

Psychology Unveiled: Exploring the Depths of the Human Mind

Exploring the Human Mind

Ahoy there, fellow explorer! It is an undeniable truth that the emotions within us drive the ebb and flow of the vast marketplace. This is precisely why the study of psychology holds such paramount importance. Join us on a journey into the realm of mass psychology, where we seek to enlighten and educate you on the intricate dynamics of the collective consciousness. Our focus on demystifying the stock market for beginners revolves around a simple yet timeless principle: Keep It Simple, Smart (KISS). Embracing simplicity often paves the way to triumph.

At the Tactical Investor, our mission is to be your guide, providing you with the knowledge and tools to harness the power of mass psychology for your own gain. By comprehending the emotions that steer the masses, you will have the upper hand in making well-informed investment choices. Waste no time in hesitation; embark with us on this voyage towards financial prosperity!

Psychology Unveiled: Emotions as the Driving Force in Markets

The underlying truth is that the stock markets are swayed by the whims of emotional crowds. To gain an advantage, one must fully grasp the intricacies of crowd psychology and the emotions that govern them. By doing so, you can position yourself against the prevailing sentiment and make wise investments.

However, be cautious, for as the masses become more irrational, knowing when to cut your losses and exit becomes paramount. This is where the principles of contrarian investing and the laws of mass psychology come into play, serving as essential tools in the arsenal of any successful investor.

Psychology Unveiled – Technical Analysis & the Unveiling of Mass Psychology

In the realm of stock market investing, the often-overlooked art of mass psychology holds the key to unravelling market trends and uncovering profitable opportunities. The masses are driven by their emotions, and by understanding these emotions, savvy investors can stay ahead of the game and exploit the tendencies of herd mentality for their benefit.

Furthermore, when combined with the study of mass psychology, technical analysis provides a comprehensive approach to investing. Equipped with precise tools and methodologies, technical analysis aids in determining overbought and oversold conditions in the markets, enabling investors to make well-informed decisions. Nevertheless, it is crucial to remember that attempting to predict market tops and bottoms is a futile endeavour that only leads to disappointment and pain. The real key lies in identifying the trend; with that knowledge, the path to investment success becomes clear.

At the Tactical Investor, we recognize the significance of mob psychology and technical analysis, which is why we have curated this section specifically for those seeking to expand their understanding of the stock market and make astute investments. Whether you are a novice or a seasoned investor, our focus is to assist you in mastering the art of contrarian investing and tilting the markets in your favour.

The Path to Stock Market Success: Embracing a Steady and Certain Approach

Heed the timeless advice: “If you delay, you lose.” In the realm of stock market investing, indecision and inaction can prove costly. Those who hesitate, waiting for the perfect moment, often miss out on opportunities altogether. The key to successful investing lies in understanding the power of emotions and the behavior of the masses.

This is why familiarizing yourself with mass psychology and technical analysis principles is crucial. Just as the fable of the tortoise and the hare teaches us, slow and steady wins the race. Begin with a solid foundation by investing in strong, financially stable companies before venturing into riskier options or penny stocks. And always remember, the optimal time to invest is when the masses are gripped by fear and uncertainty.

Psychology Unveiled: Mastering the Art of Timing and Emotional Awareness

In the realm of stock market success, a combination of sound decision-making, patience, and precise timing is essential. While rushing into options or penny stocks may seem tempting for quick riches, the reality is that only a small fraction of those who take that path achieve success. Instead, focus on reputable companies with steady earnings growth and gradually build your portfolio.

Avoid waiting too long to seize opportunities, as fear and hesitation often lead to missed chances. However, blindly following the crowd and investing when everyone else does is equally unwise. Utilize the principles of mass psychology and technical analysis to identify the optimal entry and exit points for your investments.

Consider it a race between the tortoise and the hare, where the patient and consistent approach prevails. Timing is crucial in the stock market, and delaying too much can mean missing out on the entire journey. However, by entering early, even if it involves some initial challenges, the rewards will be worth it.

Remember, the prime time to purchase stocks is when the masses are in a state of panic, while the ideal time to sell is when they are swept up in euphoria.

Avoid Confusing Market Timing with Crowd Sentiment Monitoring. It is vital to remember that the most opportune moments for stock investment arise when the masses are in a state of panic, and the best time to sell is during euphoric periods. However, it’s important not to mistake this concept for precisely timing the market bottom. Instead, focus on detecting shifts in crowd sentiment by utilizing the principles of mass psychology and technical analysis to guide your investment decisions.

Investing Wisdom for the Aspiring Stock Market Enthusiast: A Beginner’s Guide

“An investment in knowledge pays the highest dividends.” – Benjamin Franklin “Market bottoms are not reached after four-year lows but after ten- or fifteen-year lows.” – Jim Rogers “I will share the secret to becoming wealthy: close the doors, be cautious when others are overly optimistic, and be optimistic when others are fearful.” – Warren Buffett “The stock market is filled with individuals who know the price of everything but the value of nothing.” – Phillip Fisher “Investing, comfort rarely leads to profitability.” – Robert Arnott “Can you name any millionaires who became wealthy by investing in savings accounts? I rest my case.” – Robert G. Allen “Invest in yourself. Your career is the engine of your wealth.” – Paul Clitheroe “The individual investor should consistently act as an investor and not a speculator.” – Ben Graham “It’s not about how much money you make, but about how much money you retain, how effectively it works for you, and how many generations it benefits.” – Robert Kiyosaki “Know what you own and understand why you own it.” – Peter Lynch

Psychology Unveiled: The Vitality of Paper Trading

While fully comprehending the inner workings of the market may take time, it is certainly an achievable task. The key lies in being patient and persistent in your learning process.

Before venturing into real-money investments, engaging in paper trading is crucial. This practice allows you to experience the market and learn from your mistakes without risking your capital. Once you have a solid understanding, you can gradually transition to investing small amounts of real money, increasing your investments as your confidence grows.

Investor’s Respite: Let Us Lighten Your Load

The Tactical Investor goes beyond being a mere stock-picking service. In fact, more than half of those who have discovered us have become subscribers, drawn to our unique blend of information and education. By joining us, you not only gain access to stock recommendations but also learn how to trade like a seasoned professional. Follow the provided link to take advantage.

Other Articles of Interest

stock market emotions chart

Sophistication in Sentiments: The Stock Market Emotions Chart Explained

Introduction Investing in the stock market can be a daunting task, especially for those unfamiliar with its fundamental rules. However, ...
how to win stock market game

The Artful Approach to Winning the Stock Market Game

Mastering the Art: How to Win the Stock Market Game We delved into this subject a few years back, using ...
permabear

The Permabear Predicament: A Ballet of Bearish Beliefs

Being a permabear is akin to a unique form of folly that even countless harsh lessons fail to rectify. It ...
The Dynamic Approach of Small Dogs Of the Dow

Harnessing Power: The Dynamic Approach of Small Dogs Of the Dow

For those new to the world of investing, the stock market can appear as a daunting labyrinth of stocks and ...
Exploring the Human Mind

Psychology Unveiled: Exploring the Depths of the Human Mind

Ahoy there, fellow explorer! It is an undeniable truth that the emotions within us drive the ebb and flow of ...
hologram of investor and chart

Stock Portfolio Tracker

Live Stock Portfolio Tracker with Analytics Please scroll down and register for an account. If you use the incognito mode, ...
stock market crashes

What happens if the stock market crashes?

The stock market has been a popular investment avenue for individuals and organizations for many years. Despite its popularity, many ...
Intelligent Investing

Achieving Financial Goals with Intelligent Investing Strategies

Intelligent investing strategies seek to minimize risk and maximize returns through the use of thoughtful, data-driven approaches. These strategies aim ...
uranium futures price

Uranium Futures price chart

Uranium futures price chart: Is Uranium Ready To Rally By any estimate, the uranium market is trading in the extremely ...
Stock Market 2018 Graph

Stock market performance 2019

Stock Market 2018 Graph: The trend is your friend Stock market performance 2019: Financial experts continue to state that the ...
quantitative easing definition

Quantitative Easing Definition

Forever Quantitative Easing: Is it here to stay? The term forever QE has just started to come into play recently, ...
hologram of investor and chart

Stock Market Update

Stock Market Watch is our most popular and oldest stock market update service. As numerous upgrades and 2 upgrades are ...
Stock Market Quotes and Sayings

Stock Market Quotes and Sayings

Warren Buffett usually has produced a lot of great stock market quotes in regards to the discipline of investing; his ...
US Dow Jones Stock Outlook

US Dow Jones Outlook

US Dow Jones Stock Market outlook Huge amounts of money have abandoned the marketplace, suggesting the audience is panicking at ...

Dow Jones predictions: Next Target Dow 30k?

Dow 22K Predicted In July 2017; Next Target Dow 30k? Dow Jones predictions: The Dow appears to have broken through ...
US market live data

US market live data chart and commentaries

US market live trend Through a difficult patch, and this is not something new; however, when it occurs, it seems ...
Loading...

 

 

What happens if the stock market crashes?

stock market crashes

The stock market has been a popular investment avenue for individuals and organizations for many years. Despite its popularity, many experts continue to make predictions about when the stock market is going to crash, and these predictions have often proven to be wrong. In fact, going back to the Tulip bubble in the 1600s, the history of the stock market is filled with examples of experts who claimed to know when the market would crash, yet they were consistently incorrect.

One of the reasons why experts continue to make these incorrect predictions is because the stock market is inherently unpredictable. Market crashes are usually caused by a combination of factors, such as changes in government policies, geopolitical events, economic downturns, and unexpected developments in technology. It is difficult, if not impossible, for anyone to predict when and how these factors will come into play. As a result, predictions about the stock market’s future are often based on speculation and intuition, rather than sound analysis.

Another reason why experts get it wrong is that they often overlook the market’s underlying strength. Despite its volatility, the stock market has proven to be resilient over the long term, and has consistently delivered returns to investors who are willing to hold onto their investments for the long haul. This resilience is due in part to the market’s ability to absorb shocks, recover from downturns, and continue to grow, even during times of economic turbulence.

From a bullish perspective, a stock market crash can be seen as a buying opportunity. During a market crash, prices of stocks often fall dramatically, and investors who are willing to take advantage of the dip can buy high-quality stocks at a lower price. Over time, as the market recovers, these stocks are likely to appreciate in value, delivering substantial returns to the investor.

On the other hand, a contrarian perspective would argue that a stock market crash is a sign of systemic problems in the economy. During a market crash, investors are usually panicked, and they tend to sell their stocks, causing prices to fall even further. This creates a vicious cycle, as investors become increasingly pessimistic and sell even more of their stocks, causing prices to fall even more. A contrarian would argue that a market crash is not a buying opportunity, but rather a sign that it’s time to get out of the market and wait for better times.

In conclusion, while experts continue to make predictions about when the stock market will crash, their track record has been consistently poor. The stock market is inherently unpredictable, and its resilience over the long term suggests that it’s often wise to ignore the noise and focus on building a diversified portfolio that is well-positioned to withstand short-term turbulence. Whether a market crash is seen as a buying opportunity or a warning sign will depend on the perspective of the investor, but it is important to understand that, over the long term, the stock market has proven to be a reliable investment vehicle for those who are willing to be patient and stick to their investment plan.

Pray tell, in these times of economic turmoil and financial insecurity, it seems as though the masses are quick to bemoan the stock market and its tumultuous ways. Yet, it is often the case that such bearishness proves to be unwarranted, for as the great sage Warren Buffett has oft stated, the markets are a veritable guarantee to rise in the long term.

And so, even as the spectre of market crashes looms large, the astute investor must not be swayed by the rabble’s fearmongering. Nay, rather one should view these tempests as opportunities to buy quality stocks at a discounted price. For, when the masses are in a state of panic and selling off, the wise investor takes advantage, backed by the knowledge that the central bankers of the world shall not let the markets falter for long.

Indeed, look around and observe the various stimulus programs being announced. Money shall continue to flood the markets, and the fear of the masses shall be assuaged. So, embrace the corrections, good sir or madam, for they shall bring bountiful opportunities for those who have the foresight to see it.

Conclusion

Ah, but let us not forget, amidst all the uncertainty and turmoil, that a market crash can be a rare and wondrous opportunity for those with the mettle to seize it! For when the masses panic and sell off their stock in a frenzied haste, the astute investor sees not Chaos and despair, but a veritable feast of bargains and opportunities waiting to be claimed!

Indeed, as the smoke clears and the dust settles, the shrewd investor calmly approaches the market, seeking out the gems that have been cast aside by the masses in their blind panic. And as they fill their portfolios with these undervalued treasures, they bask in the knowledge that they have outmanoeuvred their less insightful counterparts and emerged from the crash not merely unscathed, but richer for the experience.

So, let the market crash if it must! For those with a contrarian spirit and an unwavering faith in their own instincts, it is but a minor bump in the road, an obstacle to be overcome on the path to riches and success!

Other Articles of Interest

stock market emotions chart

Sophistication in Sentiments: The Stock Market Emotions Chart Explained

Introduction Investing in the stock market can be a daunting task, especially for those unfamiliar with its fundamental rules. However, ...
how to win stock market game

The Artful Approach to Winning the Stock Market Game

Mastering the Art: How to Win the Stock Market Game We delved into this subject a few years back, using ...
permabear

The Permabear Predicament: A Ballet of Bearish Beliefs

Being a permabear is akin to a unique form of folly that even countless harsh lessons fail to rectify. It ...
The Dynamic Approach of Small Dogs Of the Dow

Harnessing Power: The Dynamic Approach of Small Dogs Of the Dow

For those new to the world of investing, the stock market can appear as a daunting labyrinth of stocks and ...
Exploring the Human Mind

Psychology Unveiled: Exploring the Depths of the Human Mind

Ahoy there, fellow explorer! It is an undeniable truth that the emotions within us drive the ebb and flow of ...
hologram of investor and chart

Stock Portfolio Tracker

Live Stock Portfolio Tracker with Analytics Please scroll down and register for an account. If you use the incognito mode, ...
stock market crashes

What happens if the stock market crashes?

The stock market has been a popular investment avenue for individuals and organizations for many years. Despite its popularity, many ...
Intelligent Investing

Achieving Financial Goals with Intelligent Investing Strategies

Intelligent investing strategies seek to minimize risk and maximize returns through the use of thoughtful, data-driven approaches. These strategies aim ...
uranium futures price

Uranium Futures price chart

Uranium futures price chart: Is Uranium Ready To Rally By any estimate, the uranium market is trading in the extremely ...
Stock Market 2018 Graph

Stock market performance 2019

Stock Market 2018 Graph: The trend is your friend Stock market performance 2019: Financial experts continue to state that the ...
quantitative easing definition

Quantitative Easing Definition

Forever Quantitative Easing: Is it here to stay? The term forever QE has just started to come into play recently, ...
hologram of investor and chart

Stock Market Update

Stock Market Watch is our most popular and oldest stock market update service. As numerous upgrades and 2 upgrades are ...
Stock Market Quotes and Sayings

Stock Market Quotes and Sayings

Warren Buffett usually has produced a lot of great stock market quotes in regards to the discipline of investing; his ...
US Dow Jones Stock Outlook

US Dow Jones Outlook

US Dow Jones Stock Market outlook Huge amounts of money have abandoned the marketplace, suggesting the audience is panicking at ...

Dow Jones predictions: Next Target Dow 30k?

Dow 22K Predicted In July 2017; Next Target Dow 30k? Dow Jones predictions: The Dow appears to have broken through ...
US market live data

US market live data chart and commentaries

US market live trend Through a difficult patch, and this is not something new; however, when it occurs, it seems ...
Loading...

Achieving Financial Goals with Intelligent Investing Strategies

Intelligent Investing

Intelligent investing strategies seek to minimize risk and maximize returns through the use of thoughtful, data-driven approaches. These strategies aim to make informed decisions based on a deep understanding of market trends, economic indicators, and other relevant factors rather than relying on gut feelings or emotional reactions.

One popular approach to intelligent investing is value investing, which seeks to identify undervalued stocks that have the potential to grow in the future. This approach is based on the idea that stocks are priced based on their earnings potential and that by identifying stocks that are trading at a lower price relative to their earnings, investors can achieve higher returns over the long-term.

Another intelligent investing strategy is factor investing, which seeks to identify and invest in stocks that have certain characteristics, such as high dividend yields or strong momentum. This approach is based on the idea that these characteristics are indicative of future stock performance and can be used to generate higher returns.

Additionally, intelligent investing strategies often involve the use of modern technology and data analysis, such as artificial intelligence and machine learning, to identify market trends and make informed investment decisions. By utilizing these cutting-edge tools, investors can gain a more comprehensive understanding of the market and make better-informed decisions.

Intelligent investing strategies aim to provide investors with a disciplined, data-driven approach to the stock market, helping them to minimize risk and maximize returns over the long-term. By utilizing a combination of value investing, factor investing, and modern technology, investors can achieve success and achieve their financial goals.

Other Articles of Interest

stock market emotions chart

Sophistication in Sentiments: The Stock Market Emotions Chart Explained

Introduction Investing in the stock market can be a daunting task, especially for those unfamiliar with its fundamental rules. However, ...
how to win stock market game

The Artful Approach to Winning the Stock Market Game

Mastering the Art: How to Win the Stock Market Game We delved into this subject a few years back, using ...
permabear

The Permabear Predicament: A Ballet of Bearish Beliefs

Being a permabear is akin to a unique form of folly that even countless harsh lessons fail to rectify. It ...
The Dynamic Approach of Small Dogs Of the Dow

Harnessing Power: The Dynamic Approach of Small Dogs Of the Dow

For those new to the world of investing, the stock market can appear as a daunting labyrinth of stocks and ...
Exploring the Human Mind

Psychology Unveiled: Exploring the Depths of the Human Mind

Ahoy there, fellow explorer! It is an undeniable truth that the emotions within us drive the ebb and flow of ...
hologram of investor and chart

Stock Portfolio Tracker

Live Stock Portfolio Tracker with Analytics Please scroll down and register for an account. If you use the incognito mode, ...
stock market crashes

What happens if the stock market crashes?

The stock market has been a popular investment avenue for individuals and organizations for many years. Despite its popularity, many ...
Intelligent Investing

Achieving Financial Goals with Intelligent Investing Strategies

Intelligent investing strategies seek to minimize risk and maximize returns through the use of thoughtful, data-driven approaches. These strategies aim ...
uranium futures price

Uranium Futures price chart

Uranium futures price chart: Is Uranium Ready To Rally By any estimate, the uranium market is trading in the extremely ...
Stock Market 2018 Graph

Stock market performance 2019

Stock Market 2018 Graph: The trend is your friend Stock market performance 2019: Financial experts continue to state that the ...
quantitative easing definition

Quantitative Easing Definition

Forever Quantitative Easing: Is it here to stay? The term forever QE has just started to come into play recently, ...
hologram of investor and chart

Stock Market Update

Stock Market Watch is our most popular and oldest stock market update service. As numerous upgrades and 2 upgrades are ...
Stock Market Quotes and Sayings

Stock Market Quotes and Sayings

Warren Buffett usually has produced a lot of great stock market quotes in regards to the discipline of investing; his ...
US Dow Jones Stock Outlook

US Dow Jones Outlook

US Dow Jones Stock Market outlook Huge amounts of money have abandoned the marketplace, suggesting the audience is panicking at ...

Dow Jones predictions: Next Target Dow 30k?

Dow 22K Predicted In July 2017; Next Target Dow 30k? Dow Jones predictions: The Dow appears to have broken through ...
US market live data

US market live data chart and commentaries

US market live trend Through a difficult patch, and this is not something new; however, when it occurs, it seems ...
Loading...

Uranium Futures price chart

uranium futures price

Uranium futures price chart: Is Uranium Ready To Rally

By any estimate, the uranium market is trading in the extremely oversold ranges, but when the trend is down, a market can trend into the extreme of extremely oversold ranges, and we have seen this occur many times in the past.  The 15-year chart illustrates that the next layer of support comes into play in the $21.50-$22.00 ranges, so despite being extremely oversold the market still has room to trend lower. One positive is that the trend is about to turn neutral and if it does it would be the first move into the neutral zone in a very long time.

uranium futures price graph 5 years

Source:www.indexmundi.com/

Taking a long-term view; a monthly close above $35 would be needed to indicate that a multi-month bottom is in place.  From a contrarian perspective, uranium would start to look quite tempting at any level below $23.00.

Source:www.indexmundi.com/

On the five year chart, Uranium is has broken through former support (27.50-28.00) now turned resistance and it appears that almost all the ingredients are in place for a test of the $21.50-$22.00ranges.

uranium futures price chart 15 years

Fundamentals Relating To Uranium Price

Uranium costs about $60 a pound to produce and yet mining companies can barely get $30.00 a pound for it. At some point, something has got to give, and that will most likely be the mines. More and more mines will close up shop and call it quits, and it is not easy to bring an offline mine online again; it takes time to get an inactive mine back online.

Countries like Japan, Germany and a host of other nations dreaming of giving up on Nuclear energy are well just dreaming. Japan is now re-embracing nuclear, as will Germany and or any other country with hopes to wean itself away from Nuclear power.  It is either Nuclear power or Coal, and since these countries claim to be fighting global warming, they will rather embrace Nuclear than coal.

From the fundamental perspective, the picture looks quite compelling, but fundamentals tend to paint a falsely positive picture. If we take a look at Cameco, one of the top players in this sector, the technical picture is far from positive. Despite trading in the oversold ranges, the stock broke down after posting a surprise second-quarter loss.

CCJ - Uranium Graph 5 years

The brown dotted lines represent the multiple levels of support the stock has broken through; in fact, the stock has just traded below is 2004 lows. We would not be surprised if it dipped to $8.50 with a possible overshoot to $7.20 before a long-term bottom takes hold.  If uranium trades lower but Cameco’s stock price does not take the same path, it will trigger a positive divergence signals and such signals are usually indicative of a bottom.

Conclusion

Overall while there are many factors in the fundamental arena calling for a bottom, the technical outlook has improved and Crowd Psychology illustrates that this sector is still being ignored. The ideal strategy would be to use sharp pullbacks to add to or start a new position.

Courtesy of Tactical Investor

Random views on Uranium Futures price chart

Uranium is a silvery-white metallic element that is malleable, ductile, very dense and naturally radioactive. Uranium has several important industrial applications, but its principle use is as a fissionable material (atoms that can be split apart to release energy) to produce nuclear fuel for electricity generation. Miners worldwide extract about 62,000 metric tons of uranium annually. The quest for cleaner, more environmentally-friendly fuels has propelled the growth of the nuclear industry in electricity generation. As a result, uranium has become an increasingly valuable commodity in world markets. How Did Uranium Usage Evolve? Civilizations have used uranium compounds for centuries. Archaeologists found yellow glass with 1% uranium oxide in an ancient Roman villa near Naples, Italy. In the later Middle Ages, glassmakers used pitchblende extracted from silver mines to color glass. However, chemists didn’t formally isolate uranium as an element until the 19th century. In 1789, Martin Heinrich Klaproth, a German chemist, discovered uranium oxide in the mineral pitchblende. Although he believed the compound contained a new element, he failed to produce uranium on its own. Full Story

Uranium Futures Trading Basics

Uranium futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of uranium (eg. 250 pounds) at a predetermined price on a future delivery date.

Uranium Futures Exchanges
You can trade Uranium futures at New York Mercantile Exchange (NYMEX).

NYMEX Uranium futures prices are quoted in dollars and cents per pound and are traded in lot sizes of 250 pounds .

Uranium Futures Trading Basics

Consumers and producers of uranium can manage uranium price risk by purchasing and selling uranium futures. Uranium producers can employ a short hedge to lock in a selling price for the uranium they produce while businesses that require uranium can utilize a long hedge to secure a purchase price for the commodity they need.

Uranium futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable uranium price movement. Speculators buy uranium futures when they believe that uranium prices will go up. Conversely, they will sell uranium futures when they think that uranium prices will fall. More at https://www.theoptionsguide.com/uranium-futures.aspx

Other Articles of Interest

stock market emotions chart

Sophistication in Sentiments: The Stock Market Emotions Chart Explained

Introduction Investing in the stock market can be a daunting task, especially for those unfamiliar with its fundamental rules. However, ...
how to win stock market game

The Artful Approach to Winning the Stock Market Game

Mastering the Art: How to Win the Stock Market Game We delved into this subject a few years back, using ...
permabear

The Permabear Predicament: A Ballet of Bearish Beliefs

Being a permabear is akin to a unique form of folly that even countless harsh lessons fail to rectify. It ...
The Dynamic Approach of Small Dogs Of the Dow

Harnessing Power: The Dynamic Approach of Small Dogs Of the Dow

For those new to the world of investing, the stock market can appear as a daunting labyrinth of stocks and ...
Exploring the Human Mind

Psychology Unveiled: Exploring the Depths of the Human Mind

Ahoy there, fellow explorer! It is an undeniable truth that the emotions within us drive the ebb and flow of ...
hologram of investor and chart

Stock Portfolio Tracker

Live Stock Portfolio Tracker with Analytics Please scroll down and register for an account. If you use the incognito mode, ...
stock market crashes

What happens if the stock market crashes?

The stock market has been a popular investment avenue for individuals and organizations for many years. Despite its popularity, many ...
Intelligent Investing

Achieving Financial Goals with Intelligent Investing Strategies

Intelligent investing strategies seek to minimize risk and maximize returns through the use of thoughtful, data-driven approaches. These strategies aim ...
uranium futures price

Uranium Futures price chart

Uranium futures price chart: Is Uranium Ready To Rally By any estimate, the uranium market is trading in the extremely ...
Stock Market 2018 Graph

Stock market performance 2019

Stock Market 2018 Graph: The trend is your friend Stock market performance 2019: Financial experts continue to state that the ...
quantitative easing definition

Quantitative Easing Definition

Forever Quantitative Easing: Is it here to stay? The term forever QE has just started to come into play recently, ...
hologram of investor and chart

Stock Market Update

Stock Market Watch is our most popular and oldest stock market update service. As numerous upgrades and 2 upgrades are ...
Stock Market Quotes and Sayings

Stock Market Quotes and Sayings

Warren Buffett usually has produced a lot of great stock market quotes in regards to the discipline of investing; his ...
US Dow Jones Stock Outlook

US Dow Jones Outlook

US Dow Jones Stock Market outlook Huge amounts of money have abandoned the marketplace, suggesting the audience is panicking at ...

Dow Jones predictions: Next Target Dow 30k?

Dow 22K Predicted In July 2017; Next Target Dow 30k? Dow Jones predictions: The Dow appears to have broken through ...
US market live data

US market live data chart and commentaries

US market live trend Through a difficult patch, and this is not something new; however, when it occurs, it seems ...
Loading...

Stock market performance 2019

Stock Market Performance 2018 ytd

Stock Market 2018 Graph: The trend is your friend

Stock market performance 2019: Financial experts continue to state that the markets are going to crash, even though their record since this bull market started back in 2009 has been dismal to the say the least.  To complicate matters, some of these same experts suddenly jump ship and start to paint a bullish picture until the markets start to pull back. Then they falsely assume that the markets are going to crash and start singing the “market is going to crash” song again.

Market sentiment is not extremely bullish, though the bullish sentiment has been trending upwards since Feb of this year.  Crowd psychology states that one should only abandon the ship when the masses are euphoric. As that’s not the case, there is no reason to abandon the ship.

The Market has shed some weight, but given the massive run-up, this market has experienced this falls well within the normal ranges of an acceptable correction. In fact, the Dow could drop all the way to 21,500 without having any effect on the trend.

Stock market outlook 2018 still bullish according to TI Dow Theory

Our alternative Dow Theory states that the Dow follows the Utilities and unless the utilities drop to new lows the markets will continue trading within a wide range.  The utilities have held up very well when one considers all the outside factors; extremely volatile geopolitical situation (trade wars, disputes with our NATO allies, etc.) and the extremely polarised way the masses are behaving. One would think that we are just one step away from a civil war.

Until the sentiment changes or the utilities drop to new lows, your best bet is to use strong pullbacks to purchase quality stocks.

Most financial experts are closer to clowns than experts, and most financial sites are on par with tabloids; their sole function is to create bombastic titles with little to no subject matter to back their faulty assertions.    One would be best served by taking their advice with a barrel of salt and a shot of whiskey.

Focus on Mass Psychology and identify the sentiment that’s driving the masses.  The Crowd drives the markets, and if you identify the emotion that’s driving them, you can determine the trend of the market.

Tactical Investor stock market 2018 outlook is also validated by the Dow Transports. Note that they are also holding up well and unless they trade below 9500 on a monthly basis, the outlook will remain bullish.  The trend is your friend and everything else is your foe.   As the trend is positive,  view sharp pullbacks through a bullish lens; the stronger the deviation, the better the opportunity.

Courtesy of Tactical Investor

Random views on Stock Market 2018 Graph

2018 was a record-setting year for stocks, but it’s one investors would rather forget.

The Dow fell 5.6%. The S&P 500 was down 6.2% and the Nasdaq fell 4%. It was the worst year for stocks since 2008 and only the second year the Dow and S&P 500 fell in the past decade. (The S&P 500 and Dow were down slightly in 2015, but the Nasdaq was higher that year.)
December was a particularly dreadful month: The S&P 500 was down 9% and the Dow was down 8.7% — the worst December since 1931. In one seven-day stretch, the Dow fell by 350 points or more six times. This year’s Christmas Eve was the worst ever for the index.
The S&P 500 was up or down more than 1% nine times in December alone, compared to eight times in all of 2017. It moved that much 64 times during the year.
2018 wasn’t all bad. The S&P 500 set an all-time record on September 20, and the Dow closed at its record on October 3. The Dow also closed more than 1,000 points higher on December 26 — the first time it ever accomplished that feat.
But 2018 will be remembered for its extreme volatility. The VIX volatility index spiked, and CNN Business’ Fear & Greed Index has been stuck in “Extreme Fear” throughout much of the year. The Dow has swung 1,000 points in a single session only eight times in its history, and five of those took place in 2018. Full Story

Unlike last year, when the stock market rose steadily — and considerably — in the first quarter, Wall Street has gotten off to a disappointing and disconcerting start in 2018.

As concerns have shifted back and forth from a sluggish economy to an overheating one, the market has taken investors on a roller coaster ride, resulting in poor returns and testing investors’ strategy and resolve.

A SLUGGISH START
Unlike last year, stocks stumbled at the start of 2018.
Making matters worse, there has been no place to hide in the stock market so far this year.

In the first quarter, losses were felt across the board — not only in sectors that performed well at the start of 2017 but in both economically sensitive areas of the market (such as real estate and basic materials) and defensive areas (such as consumer staples and utilities).
Meanwhile, market volatility has come back with a vengeance.

Wall Street strategists typically look at the Chicago Board Options Exchange Volatility Index to judge the rockiness of the market. And by that gauge, which measures fear based on options trading, volatility returned to levels seen in the financial crisis years.

But there’s a simpler way to judge how shaky the market is, and that’s to count the number of days in which stocks climb or fall by 1% or more. In the first quarter of 2018, there were 25 such trading days, more than in any full year since 2009. Full Story

Here are some ingredients for stock-market gloom: A trade dispute between the world’s two largest economies, a Federal Reserve pushing the yield curve toward inversion, and a U.S. president under investigation by an independent counsel.

But enough about 1994.

Seriously, though, investors might want to take a look back at the events of the same year that brought the world Forrest Gump and the founding of a plucky little company called Amazon for a “possible analog” to the current stock market environment, argued Tony Dwyer, analyst at Canaccord Genuity, in a Monday note that highlights the chart below, one that looks somewhat similar to the pattern seen in 2018.
The S&P 500 index SPX, -0.53% fell 1.5% in 1994, according to FactSet, while the index is down 3.9% in the year to date in 2018.

Dwyer emphasized that the backdrops now and in 1994 aren’t exactly alike, but said there are enough similarities between the current political, macroeconomic, Fed policy and market environment to that year to potentially offer some insights.

Moreover, if 1994 and 2018 share similar backdrops, does 1995 offer a guide to 2019? Dwyer noted that after the near-doubling of short-term interest rates in 1994, the first half of 1995 saw just 0.5% annualized gross domestic product growth. The Fed, however, remained worried about inflation and hiked interest rates one more time in February. Full Story

 

Other Articles of Interest

stock market emotions chart

Sophistication in Sentiments: The Stock Market Emotions Chart Explained

Introduction Investing in the stock market can be a daunting task, especially for those unfamiliar with its fundamental rules. However, ...
how to win stock market game

The Artful Approach to Winning the Stock Market Game

Mastering the Art: How to Win the Stock Market Game We delved into this subject a few years back, using ...
permabear

The Permabear Predicament: A Ballet of Bearish Beliefs

Being a permabear is akin to a unique form of folly that even countless harsh lessons fail to rectify. It ...
The Dynamic Approach of Small Dogs Of the Dow

Harnessing Power: The Dynamic Approach of Small Dogs Of the Dow

For those new to the world of investing, the stock market can appear as a daunting labyrinth of stocks and ...
Exploring the Human Mind

Psychology Unveiled: Exploring the Depths of the Human Mind

Ahoy there, fellow explorer! It is an undeniable truth that the emotions within us drive the ebb and flow of ...
hologram of investor and chart

Stock Portfolio Tracker

Live Stock Portfolio Tracker with Analytics Please scroll down and register for an account. If you use the incognito mode, ...
stock market crashes

What happens if the stock market crashes?

The stock market has been a popular investment avenue for individuals and organizations for many years. Despite its popularity, many ...
Intelligent Investing

Achieving Financial Goals with Intelligent Investing Strategies

Intelligent investing strategies seek to minimize risk and maximize returns through the use of thoughtful, data-driven approaches. These strategies aim ...
uranium futures price

Uranium Futures price chart

Uranium futures price chart: Is Uranium Ready To Rally By any estimate, the uranium market is trading in the extremely ...
Stock Market 2018 Graph

Stock market performance 2019

Stock Market 2018 Graph: The trend is your friend Stock market performance 2019: Financial experts continue to state that the ...
quantitative easing definition

Quantitative Easing Definition

Forever Quantitative Easing: Is it here to stay? The term forever QE has just started to come into play recently, ...
hologram of investor and chart

Stock Market Update

Stock Market Watch is our most popular and oldest stock market update service. As numerous upgrades and 2 upgrades are ...
Stock Market Quotes and Sayings

Stock Market Quotes and Sayings

Warren Buffett usually has produced a lot of great stock market quotes in regards to the discipline of investing; his ...
US Dow Jones Stock Outlook

US Dow Jones Outlook

US Dow Jones Stock Market outlook Huge amounts of money have abandoned the marketplace, suggesting the audience is panicking at ...

Dow Jones predictions: Next Target Dow 30k?

Dow 22K Predicted In July 2017; Next Target Dow 30k? Dow Jones predictions: The Dow appears to have broken through ...
US market live data

US market live data chart and commentaries

US market live trend Through a difficult patch, and this is not something new; however, when it occurs, it seems ...
Loading...