While some opportunists thrive in adversity, experts say that for many investors it takes a toll on mental health.
Schott told Reuters the work of Nobel laureate Vernon Smith demonstrated that market bubbles are primarily due to psychological factors, not financial ones. After prolonged bull markets, investors tend to go into denial during bear markets. For younger investors who have not experienced prolonged downturns, the bull-market, buy-the-dip strategy of the past decade no longer works. They can experience a sort of cognitive dissonance, Schott said.
Goldman Sachs said its Sentiment Indicator in the last week of September posted its 31st consecutive negative reading, a stretch surpassed only by 32 straight weeks of negative readings ending in March 2016.
Market is still better than pre Covid.
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