moods, fears, hopes

THEon September 6, the week started well on the Paris Stock Exchange, the CAC 40 saw pink and gained almost 1%. On the eve of the weekend However, the markets had received grim news: job creation in the United States was, in August, much lower than expected.

Digested already, the bad news? Commentators put forward another explanation: these disappointing economic results have fueled investors’ hopes that the US Federal Reserve will extend its accommodative monetary policy … After all, bad news is good news (“Bad news is also good”), we say in English. Confusing.

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And this is the concern for those who try to predict the behavior of the markets: their reactions are sometimes (often?) Counter-intuitive, giving the impression that this Stock Exchange is decidedly indomitable. No wonder: in the short term, stock market performance is just a sum of the fears, hopes, expectations and moods of hundreds of thousands of people. Irrational.

Tame the beast

If on an individual basis, we can, to a certain extent, learn to control our own psychological biases, these reflexes which prevent investment in an objective way, it is difficult to predict the moods of these other buyers and sellers of unknown stocks. . Result, one day it climbs, one day it unscrews, and you have to deal with … or give up.

“With its chaotic reactions, I see the Stock Exchange as a kind of monster, an animal that doesn’t look like anything familiar, notes economist Mickaël Mangot, specialist in behavioral finance. But in the long term, this animal is not malicious but docile, with reassuring and regular performances. “

All the articles in our dossier “Taking your first steps on the stock market”

What can we remember for the budding investor launching himself on the stock market today, and what is more in this uncertain context? If anticipating short-term fluctuations is a challenge, you will never waste your time learning how technically the machine works – it is with this in mind that this dossier was designed to support budding investors in their first steps. not in the markets.

To limit disappointments, it is better to understand the nature of the products you buy (some are devilishly complex), the mechanisms of stock market orders and the fees that you will be charged. You will not tame the beast but you will perhaps tame it …

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