Overcoming Your Fear and Greed in the Stock Market

October 2018 has not been a good month for stock market investors.  The major U.S. indexes have wiped out their gains for the year and investors are panicking that we are heading for a full stock market crash.

The October Effect.

Media outlets who are always looking for a story have coined the term the “October Effect”. This refers to the fact the market declines strongly during October of every year.  This weakens investor confidence which starts a self-fuelling a cycle of market decline.

In fact, the October Effect is a myth.  Research done by liberatedStocktrader.com on the best months to buy stocks suggests that October is neither a great month for stock market returns or a bad month.  The research looked at monthly stock market returns for 29 year from 1980 to 2009 and concluded that in the 1980’s the market return +0.5%, in the 1990’s +1.9% and in the 2000’s +0.2%.  In fact, from 2010 to 2014 the best month to buy stocks was October, which returned +3.8%

Obviously, October in 2018 has been a bad month, but the statistics show that there are no fixed patterns.

How to Overcome Investing Fears.

Tune Out

One secret to overcoming your fears in the stock market are to tune out or at least reduce your intake of sensational news.  Recognize that news outlets need to sell stories, and boring stories do not make money.

Use Modern Market Data

You can also use the wealth of stock market and financial data to inform your own opinions.  The Fear and Greed Index was a term coined by CNN to try to assess the sentiment of investors.  This approach to assessing the investor sentiment has been given a remake by Certified Financial Technician Barry D. Moore.  The Liberated Stock Trader’s Modern Fear and Greed Index  take a new look at investor sentiment to enable you to visualize the amount of concern the market participants have.

“Using the right mix information, we can build a solid picture of how investors feel by using sentiment indicators and market supply and demand data” says the creator.

The Modern Fear and Greed index uses a combination of:

  • The Chicago Board of Options Exchange Volatility Index (Ticker:VIX)
  • The NYSE Advance Decline Ratio (Ticker:ADRN)
  • A 20 Bar Moving Average on a Weekly Chart of the S&P500
  • The American Association of Independent Investors (AAII) Sentiment Indicator
  • A mix of 26 additional technical analysis conditions

Using this data in combination enables you to build your own picture and opinion as to where the market is heading, which should ease your tension.

January 2, 2021 Update: We have just announced our BEST STOCK NEWSLETTER of 2020 AWARD!

CLICK HERE to find out which stock newsletter was up 78% in 2020 (and whose 2019 picks are now up 113%).

*** Our Award for BEST STOCK NEWSLETTER of 2020 ALERT ***

Updated January 2, 2021

At WallStreetSurvivor, we subscribe to dozens stock recommendation and advisory newsletters. There is ONE newsletter that is constantly outperforming all of the others--The Motley Fool Stock Advisor.

Five of their 2020 stock picks have doubled and the average return of all 24 of their stock picks for 2020 is up 78%!

We have been tracking ALL of the Motley Fool stock picks since January 2016. That's 5 years and 120 stock picks. As of Friday, January 1, 2021 the Motley Fool's January stock pick (TSLA) is up 720%, their March pick (ZM) is up 172%, their April pick of SHOP is up 226% and their June pick CRWD is up 120%; and another two have more than doubled. In addition, 10 of their 2019, 12 of their 2018, 11 of their 2017, 15 of their 2016. Most impressively, over the last 5 years that we have been tracking every recommendation, their average stock pick is up 209%--tht means over the last 5 years their stock picks, on average, have TRIPLED!

Now no one can guarantee that their next picks will be as strong, but our 5 years of experience has been super-profitable. The important thing about the Fool stock picks is you have to buy them the day they are recommended because they usually pop 5-10% in the first 72 hours after the release their recommendation. You sure don’t want to risk missing out on their next pick.

Normally the Fool service is priced at $199 per year but they are currently offering a NEW SUBSCRIBER DISCOUNT that allows you to get theiir next 24 stock picks for just $99/year. HERE is the LINK to visit their New Subscriber Discount page.

CLICK HERE to get access to all The Motley Fool’s Stock Picks and their next 12 months of picks for just $99 per Year! 



GET UP TO $1,000 IN FREE STOCK

WHEN YOU OPEN A ROBINHOOD BROKERAGE ACCOUNT

Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.

Here’s the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $500. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $500. Click here to learn more about this Special Robinhood offer.

Claim your free stock NOW (before it’s too late)



Comments are closed.