Syndicate
Optimism and Fear in People Regarding Stocks
The big financial institutions could use the mechanism of advertising to make the public sensible to the stock exchange. The new emissions of stocks would be offered aggressively to the public through banks and would offer, in addition, soft loans. After the na?ve people had bought their stocks, there comes the moment in which that does not continue on. The prices become stuck or go down. Many stock holders start to lose their patience. For them this is not a nice surprise. When they acquire the stocks they were convinced, after the promises of the promoters that the market rates would definitely go up. Of the stock went down, they would consider it as a personal thing and like they had been betrayed. Most of the public that enters the stock exchange market boom do not have a lot of experience and cannot even think that despite the recommendations of the promoters, the market rates can go down and even sometimes down to unsuspected depths. During the first two thirds of the cycle the public in general and those that are na?ve, behave fearful and during the third final become confident and optimistic. This confidence lasts during the first two thirds of the descending cycle and turns into fear towards the final stage of the declining cycle. On the other hand, the clever ones act confident during the first two thirds of the ascending cycle, and become more fearful when the third final of the cycle come around. Their fearful attitude lasts during the first two thirds of the decline cycle and turns into a trusting and optimistic attitude when it reaches the last third part of the cycle.