Concern, complacency, and capitulation!

"People are wired to be emotional investors. Peter Lynch, former money manager and Vice Chairman of Fidelity Investments, makes the case that investors continually pass in and out of three emotional states: concern, complacency, and capitulation. He explains that the typical investor becomes concerned after the market has dropped or the economy seems to have faltered, which keeps this particular investor from buying good businesses at excellent prices. Following this logic, after the investor buys at higher prices, he or she gets complacent when the stock continues to rise. This is precisely the time to review the company’s fundamentals. However, this type of investor will generally let it ride. Then finally, when the stock falls on hard times, and the price falls below the purchased price, the investor capitulates and sells on a whim."

Concern, complacency, and capitulation!