By John Sage Melbourne
All markets reflect the expectations of the market participants in response to existing market conditions and expected market advancements.
Individuals tend to be usually greedy when they believe the cost will increase. Alternatively,they can quickly end up being managed by fear and panic when they think that rates will fall. Human nature in this regard is the same in all investment markets all over the world.
All investment has a component of speculation and all speculation need to in turn be based upon premeditated calculation. There are different categories of market participants:
• The trader who deals with the time frame of a couple of days or weeks
• The speculator who deals with the time frame of a couple of weeks to less than a year and
• The investor who deals with an amount of time of a number of years or more.
All market participants need to be prepared to take a contrary position to the market when the crowd moves the market above or below its true worth.
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Each participant should keep a clear head,freed of emotional response.Your essential tool is a rational objective methodology on which to make sound investment decisions.
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