In times of extreme market volatility caused by blinded investment sentiment, where global indexes tumbled for the majority of 2022, with the Nasdaq 100 falling 32.94%, the S&P 500 dropping 20.19%, the Dax slipping 15.13%, the FTSE 100 falling marginally by 3.09%, the Shanghai Composite going down by 15.63%, and the JSE Large Cap modestly falling 7.21%, year-to-date respectively.
This plunge in global markets put to the test our investment styles, strategies, philosophies, and patience. Whether you are an arbitrageur, a speculator, a hedger, a fundamentalist, or a technicalist, investment sentiment somewhat shapes and frames our emotional and cognitive financial behaviour in face of market turmoil.
In these present market uncertainties, what is the best course of action to take? Is it best to do nothing, or is it best to take abrupt corrective measures to ride with the sentiment? Or alternatively, you could consult with your financial advisor about withdrawing all of your investments to cushion your hard-earned financial resources.