Connect with us

Business

Phuket Business: Recalling the cycle of market emotions

Published

 on 

PHUKET: My first investment was in a stock fund in 1990 when I was an engineering student at university. I was told to just buy and hold and put money in blindly and it will grow.

They were somewhat right but I wanted to know more and began a quest to find a way to pinpoint what is known as the cycle of market emotions curve.

The point of maximum financial opportunity is at the bottom of the curve (despondency and depression). This is the ideal time to buy, but your emotional state (and mine) will be feeling overwhelmed. The market does bottom and turn into a bull market. It is not different this time. It is important to understand this cycle of market emotions.

One of the greatest investors of all time, Sir John Templeton, said: “Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.”

So the news is turning more positive because we are in the maturing optimism stage. This is determined by looking at many components of investor psychology, global monetary policy and technical analysis.

A bear market (20+ points or more decline) is highly unlikely until we reach the ‘thrill’ and ‘euphoria’ stages. This time will come but is likely 12-30 months out depending on how fast investors warm up to buying stocks and what the Federal Reserve does.

Right now, growth stocks are the place to be investing in. This optimistic stage rewards investors who take risk and buy stocks with strong earnings and sales.

One point I want to make is the news in the early stages of a bull market (say in 2009) is often horrible doom and gloom. But bad news is actually good news and the stock market rallies.

Now we are entering a period of optimistic news. So when economic numbers come out and show strong job growth or home sales are up, we will see the market move higher. In this stage I would expect to see stocks release a strong quarter of earnings or sales.

Recently we’re seeing the global markets firing on all cylinders and economic news will continue to turn positive, while jobs and the housing market improve. Enjoy this period of growth. This is such an important stage. If you have laggards that aren’t participating, they need to be sold to focus your assets in stocks and funds hitting new highs and leading the market.

Don Freeman is president of Freeman Capital Management, a Registered Investment Advisor with the US Securities Exchange Commission (SEC), based in Phuket, Thailand.

He has over 15 years experience and provides personal financial planning and wealth management to expatriates. Specializing in UK and US pension transfers. Call 089-970-5795 or email: freemancapital@gmail.com.

— Don Freeman

 

Get more from The Thaiger

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Thailand25 mins ago

Elon Musk angers Ukraine president with Russia tweets

World1 hour ago

Europeans arrested in Iran

Thailand1 hour ago

Thai woman charged for selling fake discount vouchers

Crime2 hours ago

Expressway killer reveals 3 month plan to murder girlfriend in remorseless confession

Thailand3 hours ago

Prayut plans to contact citizens hit by power cuts via radio

Thailand3 hours ago

Submarine purchases could sink over engine debate

Join the conversation on the Thaiger Talk forums today!
Guides3 hours ago

Best IB schools in Thailand

Bangkok3 hours ago

VIDEO: Paramedics push patient through Bangkok floods on stretcher

Coronavirus (Covid-19)4 hours ago

Schools no longer need to close for Covid outbreaks

Thailand4 hours ago

Thai industries want to produce energy to combat rising costs

Crime4 hours ago

Clumsy burglar injures himself after trying to steal in Chon Buri

Thailand4 hours ago

Mountain B nightclub fire claims 24th life

Thailand5 hours ago

Thailand & Australia pledge to stamp out trafficking

Thailand5 hours ago

Jail Term for Carrying Crops & Repossessing the wrong house | GMT

Phuket5 hours ago

Girl sustains head injuries while surfing in Phuket

Thailand1 year ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand2 years ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism2 years ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket2 years ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism2 years ago

Phuket Thai food treats you need to try | VIDEO

Thailand2 years ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism2 years ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand2 years ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand2 years ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand2 years ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand2 years ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand2 years ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand2 years ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand2 years ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand2 years ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Trending