There is no new thing under the sun Ecc 1:9
Although there are different headlines in the news and different stocks traded on the exchanges at any given time,
the one thing that remains consistent over time is human emotion. During highly volatile market inflection points,
human emotion is a consistent and measurable indicator that generally isn't accounted for in any research reports or
stock analysis. This methodology is by no means perfect however, it's a best effort attempt to measure perception,
emotion, fear and greed, with the expectation that people will react to market stressors the same as they have in the past.
A quantitative approach to measuring risk has been developed to look at people and how they react to stock market price
fluctuations. Regardless of education, wealth, knowledge, or any other factor that may make a person seem wise, people react
the same way when fear or greed sets in. No matter how many times a fire drill is rehearsed, when a serious emergency presents
itself, the exit is often not good.
There are three key factors to successfully implementing this portfolio management process. The first is having sufficient
knowledge and understanding of the financial markets which takes time to acquire. The second is having adequate time and
dedication to develop skill. The third is having the proper discipline to continually monitor the process. Many individuals
have some or even all of these characteristics but, simply lack the time, interest, or expertise to dedicate themselves to
managing their own portfolios properly. With the exception of those whom are confident in their knowledge, skill, and
discipline to manage this process, it is strongly advised to seek professional assistance.
