Kiplinger

The Psychology of the Stock Market and Investment Decisions

There is an incredible euphoria when an investment portfolio is doing well. Performing at higher-than-average levels can make investors feel invincible. But without the emotional lows that the market can cause, these highs could not be possible.

Many key factors contribute to the movement of the market, and investors need to be aware of these considerations in order to thrive in today's volatile environment.

Multiple factors move markets

Interest rates are a driving force of movement in both the stock and bond markets. Rising rates have an adverse impact on bond prices as well as a dampening effect on stock prices. Unfortunately, many average investors underestimate the impact of rate movements on their investments until after the impact is felt.

Similarly, and the speed at which information is disseminated serves to increase market volatility and create

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