………..Investors have to face fear every day, although more so on some days than others (nobody complains about volatility to the upside), and don’t often face it very effectively. To quote Jason Zweig paraphrasing Mike Tyson, “investors always have a plan until the market punches them in the face.”
Real fear comes with names, faces, and a story. And oh how we want deliverance from our fears. Now that downside volatility is back with a vengeance, market commentaries are full of fear stories, since markets are driven by narratives much more than they are driven by data. As Morgan Housel has cautioned: “The business model of the majority of financial services companies relies on exploiting the fears, emotions, and lack of intelligence of customers. The worst part is that the majority of customers will never realize this.”…….
More here – Above the Market