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Overreaction

Exploring Overreaction in Financial Markets: Understanding the Psychology Behind Extreme Market Behavior

Overreaction in financial markets can lead to significant fluctuations in asset prices, driven by emotional responses rather than fundamental factors. Learn about the concept of overreaction, its implications for investors, and examples throughout history, including asset bubbles and market crashes. Gain insights into how behavioral finance theories explain these phenomena and how investors can capitalize on them.