March 1, 2011 – Why are some investors now moving back to equities instead of seeking haven in gold and silver? It’s the same psychology that drives gamblers back to the game – they want to salve the wounds of losing with the hopes of winning it all back.
One well worn definition of insanity is to keep doing the same things expecting different results, but it seems humans are predisposed to “what psychologists call ‘counterfactual regret’ – the haunting sense of what might have been,” says Wall Street Journal’s Jason Zweig.
Investors still aching from the realization that they would have been far better off had they held onto their stocks are apt “to plunge impulsively back into the very market that burned them so badly” just because they want to be winners this time. Their “memories of loss in the financial crisis already are fading, while the regrets over being out of stocks are refreshed every day the market goes up.”
But that is exactly what the insiders are counting on. They panicked investors into selling them their holdings at bargain prices and they are now playing on emotions to unload the overpriced equities back on the very same people. It’s a never ending cycle driven by lies – lies about the economy, lies about the market’s future, and lies about safer alternative investments.
“In fact, behavioral science tells us that [Wall Street] and politicians are lying to us 93% of the time,” says Paul B. Farrell in Market Watch. We believe the lies “because our brains are preprogrammed to cooperate in their con game.”
But our brains can also make choices. We can choose to break the cycle. We can choose to be more careful about what we accept as fact. And we can choose to put aside our emotions, and do what our common sense tells us is right – invest in gold and silver.
Senior Staff Writer – GoldSilver.org