Posted by on Feb 29, 2020 in Articles & Advice, Blog, Books, Columns, Featured |

Image Credit: Oda Krohg, “By the Kristianiafjord (A Japanese Lantern),” 1886, National Gallery of Norway



By Jason Zweig | Feb. 26, 2020 8:00 am ET


When markets crumple, the culprits usually aren’t the smallest investors, but the biggest.

So far, most individual investors have remained steadfast as stocks have been pummeled by fears that the coronavirus could turn into a pandemic. If they continue to keep their cool, small investors might even get to buy bargains as the big money bails out.

Professional investors tend to move the fastest when a market suddenly turns. That’s largely out of self-preservation, because the biggest risk they face is being so out-of-step with the market that their clients fire them. That can lead the pros to chase the market trend too far and too long.


To read the rest of the column:


For further reading:


Benjamin Graham, The Intelligent Investor

Jason Zweig,The Devil’s Financial Dictionary

Jason Zweig, Your Money and Your Brain

Jason Zweig, The Little Book of Safe Money


Articles and other resources:


Stephen P. Utkus and Jean A. Young, “Investor Expectations: A New Survey” (Vanguard)

John Maynard Keynes, The General Theory of Employment, Interest, and Money, Chapter XII, “The State of Long-Term Expectation

Dimitri Vayanos and Paul Woolley, “An Institutional Theory of Momentum and Reversal

Patrick Dennis and Deon Strickland, “Who Blinks in Volatile Markets, Individuals or Institutions?

How to Handle a Market Gone Mad

When the Stock Market Plunges…Will You Be Brave or Will You Cave?

Knowing If You Can Stomach the Next Big Market Swing

Learning from the Bear Market of 1973-1974

When Investing in Stocks Makes You Feel Like Throwing Up and You Do It Anyway

A Matter of Expectations