View Full Version : How emotion effects stock prices.

03-03-2011, 01:30 AM
Investor Benjamin Graham felt stocks are frequently mis-priced. Since a stock's value is dependent on humans, human emotion can play a large part in it's value at any given time.

Two major emotions seem to rule the stock market and a constant battle follows. Fear tends to drive stock prices down, while greed drives them up.

If you can control your emotions and base your value of a company, not on emotion but instead on factual information, you will more clearly purchase investments at an acceptable value, regardless of daily market fluctuations.

Investor Warren Buffet often says to be greedy when others are fearful and fearful when other are greedy.