This week, I’m talking about stock market crashes and the predictable emotional pattern that all crashes follow. If you know how to spot a stock market bottoming process, you’ll be better equipped to take advantage of the amazing opportunities that exist at and near the bottom. 

Today I’m talking about the emotions that define a stock market bottom. It’s worth mentioning again because I can’t stress the importance of this enough - while stock markets are unpredictable, market cycles follow a very predictable emotional pattern.

So here’s what the stock market bottoming process looks like from an emotional standpoint: 

1st - anxiety. There’s a few cracks and reasons to be concerned, maybe a few down days in the stock market, but the market is relatively close to it’s highs.

Then as the market drops further, we now have fear. People are scared. Headlines are starting to predict doom and gloom. Stocks are dropping. 

Near the bottom is panic. This is an important emotion, because this is where most people will abandon stocks and their long-term strategy and it’s usually the height of selling. My guess is that we likely passed through the days of panic in the current crisis in late March when the stock market was dropping so much and so fast that it actually triggered its circuit breakers and trading temporarily halted. Classic case of panic selling. 

Many people think that panic is the bottom but it’s actually not. The bottom is defined by surrender and a throwing up of the hands. When you start to read stories and headlines about how this time is different and it doesn’t seem like we’ll be able to crawl out of the market and economic hole that we’re in, then surrender has arrived. 

Then at the very depths and closely tied to surrender is hopelessness and depression. These are the emotions that mark a true market bottom. 

While it’s impossible to pinpoint the exact market bottom, when you know that the depths of the market bottom are marked by surrender, hopelessness, and depression, you can then recognize the bottoming process for what it really is - the point of maximum opportunity.

Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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