Financial Glossary: Herd Instinct


en			ru			jp

Herd Instinct

Herd Instinct

A mentality characterized by a lack of individuality, causing people to think and act like the general population.

This term is used in the investing world to refer to the forces that cause unsubstantiated rallies or sell-offs. Herd behavior describes how individuals in a group can act together without planned direction. The term pertains to the behavior of animals in herds, flocks, and schools, and to human conduct during activities such as stock market bubbles and crashes, street demonstrations, sporting events, episodes of mob violence and even everyday decision making, judgment and opinion forming.

Large stock market trends often begin and end with periods of frenzied buying (bubbles) or selling (crashes). Many observers cite these episodes as Clear examples of herding behavior that is irrational and driven by emotion -- greed in the bubbles, fear in the crashes. Individual investors join the crowd of others in a rush to get in or out of the market.

Posted by Privatebanking.com

Back

Privatebanking.com

Get the attention you always wanted and promote your corporate image and standing by benefiting from our state of the art interactive web presence.

Ascent Limited

Experience The Difference. Ascent Limited provides first class wealth management and family office services. Our private banking team, assembled from a group of highly experienced banking professionals, will provide financial advice tailored to your individual requirements and keep your portfolio in tune with the latest market developments and opportunities.

©	Copyright by PRIVATE BANKING.COM 2002- - All rights reserved.