Question

impact of the fear of investing in social environment

Answer 1

Social Environment defines a lot of things. Main of them is investments.

When the market is bullish and a rally takes place, there is a general sense of euphoria among the public, the social environment is bullish and upbeat and everyone thinks that the market has become one sided and only will go up. Thus the social environment if positive leads to humongous inflows in terms of investments.

Social environment and also investments are related. There may be times when the market is in a mood to rally, but due to some social environmental event the euphoria is lacking and hence there is no market movement. It is general knowledge that the equity markets are sentiment driven. This sentiment has one leg in social environment also.

There is always a prevalent fear on investing in social environment as also a prevalent greed. However the part of fear is slightly tricky to deal with because overcoming greed can be one shot easier, but convincing someone to come out of fear takes more than that. Fear of investing comes when there is some uncertainty, some sense of doomsday and everything in the world collapsing. While stock market and every other market always has and will have cycles of crest and trough, it needs to be accepted that this is how the way market functions. This may help to remove the fear of investing.