What causes some investors to fear volatility? I suspect it is that any share price decline signifies a disruption in their expectations. If you work hard and have $10,000 left over from your labor, and choose to buy an ownership stake in a business that has a track record of growing, you expect to not only see that $10,000 be maintained but grow as well. If your investment falls in value to $6,000, the evaporated $4,000 feels as though you had nothing to show for your labor. Even in instances where that investment may first rise to $16,000 but then fall down to $12,000, it still feels like a loss because we are pretty darn good at treating increases in the value of investments as though it is some permanent marker of wealth that has been rebased upward.
You may also wonder: If it is so darn unpleasant to see … Read the rest of this article!