Markets Not Fully Rational: Emotion and Psychology Play Major Roles in Market Swings
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The Efficient Market Hypothesis has flaws; markets are not entirely rational or efficient. Psychology and emotion play a big role.
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News and economic data do not fully explain market movements. Large moves often happen without identifiable news triggers.
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Recent studies show investors do not act purely rationally. Market moves are driven by emotion and biases.
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The current paradigm for understanding markets is inadequate. A new theory is needed to explain market swings.
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For now, the market could still rally higher before a crash sets up. More time is needed to see if a 5-wave decline takes hold.