Comments on: Does Greed Always Trump Fear?

By: + The Carnival of Personal Finance #228: Halloween 2009 Edition | Credit Wise Info

Sat, 26 Mar 2011 18:59:09 +0000

[...] Elizabeth G from Modern Gal asks us, “Does Greed Always Trump Fear?” [...]

By: Elizabeth

Elizabeth — Fri, 30 Oct 2009 13:44:14 +0000

traineeinvestor, interesting point on the adverse emotional impact. If the survey data is correct, a number of individual investors are still holding on to large cash positions in their savings and retirement portfolios, in other words giving in to the fear element. This would mean that they have missed out on the market’s rebound from March to date, and are at risk for underperforming with respect to inflation.

By: traineeinvestor

traineeinvestor — Fri, 30 Oct 2009 09:58:10 +0000

There are plenty of studies showing that the adverse emotional impact of a negative event is greater and lasts longer than the favourable impact of a positive event.

On that basis I would have thought that fear is a stronger emotion than greed.

I’m not sure whether the curernt market is being driven by greed (hoping to make a profit) or fear (worry about underperforming for fund managers who had too much cash or inflation or whatever for other investors).

As an aside – the last thing we need is more regulation – our lives are excessively regulated already. We need regulation which is better – simpler, more focused and more effective. It would also help if we had regulators who were willing and able to effectively monitor and enforce.