Wise things to know about equities(2)

Unfortunately such spot on accuracy is usually impossible to achieve, so what you can do is try to catch a portion of each big swing.

You buy when the upswing has begun, and sell as the downswing starts.

But for this to work, you must be able to curb your greed as you don't know exactly when the top or bottom is reached.

The stock market can be said to be driven by two emotions:

greed and fear.

People get caught up in the boom fever and pay silly prices for unworthy shares - this is greed driving bull markets.

In bear markets, people get carried away with the ruling pessimism and are overeager to believe the worst rumours - this is fear dominating bear markets.

You must step away from the crowd and not let the mob mentality take over your rational reasoning and action.