All too often, human nature causes us to be overly influenced by our emotions rather than logic. This is particularly relevant when it comes to our investment decisions.
For a long time now, we have been aware of the fear/greed cycle that amplifies investment market peaks and troughs. Yet, time and time again, we repeat this behaviour. We chase the returns and create a bubble. As I write this, we are seeing this with Bitcoin, people are buying for the sole reason that they think it is going up. This is nothing new, we had the Tech bubble where anything and everything in the technology space was being bought, prices went through the roof. Most people buying shares did not even know what the companies they were buying into actually did. Some companies had yet to make any revenue at all and had a market value in the tens of millions. Is this logical? Nope, it’s greed dictating our investing habits.