Software isn’t greedy or fearful
As anyone who has had money in a wild bull or bear market can attest, investing can be an emotional affair: the panic that comes when everything suddenly plummets; the sense of missed opportunity as the market soars. When one of our stocks suddenly takes a dive, we doubt our original hypothesis about its value. This is why stop-losses – the practice of putting a ceiling on losses by triggering an automatic trade out of a falling position – are so prevalent, even though they go against principles of value. Sooner or later, all but the coolest investors let their emotions get the best of them and try to time the market, selling stocks before the market drops and buying again right before it rises.
via Thankfully, Software Is Eating The Personal Investing World | TechCrunch.