The Cycle of Market Emotions

This is the market sentiment shown in the form of Product Life Cycle theory where there are four
stages;
a) Introduction stage - The investor at the starting stage in market cycle is at optimist
stage seeking that market will grow and they will earn huge profits on share.

b) Growth stage – At growth stage market cycle excitement and thrill stage where they are
excited and thrill about earning huge profit in market. And the thing is new for investor
they are excited and thrill to make a mark for them.

c) Maturity stage – In maturity stage the market cycle covers euphoria where the product
which is at peak of its sale the market where investor can earn profit selling their shares
which they bought at lower price. At this stage people prefer to sell to optimize their
profit.

d) Decline stage – The decline stage covers anxiety, denial, fear, desperation, panic and
capitulation. Anxiety the market is at the verge of decline. Denial it is a temporary
setback for long term investor but not for short ones. Fear at this stage their creeps a fear
in mind of investor of suffering loss. Desperation the investor is desperate to earn profit.
And they become desperate because of constant decline in market. Panic comes when
investor doesn’t earn profit and investor start to panic and make mistake. And as a result
capitulation creeps in which means investor start to think that the market aren’t for them.
And at decline the market gets stable at the stage it is called despondency and
depression. And that is time where market stables itself from a loss and recollects itself
to growth one. Were the investors once again looking as an opportunity to invest in
market? Then again in growth stage it covers hope, relief, and optimism. This were the
investor once again get hope and little bit of growth brings relief on face of investors. The
market reaches to optimism stage where they have started it. That is why it is called
Market Cycle because it is continuous process and never ending one. And along with
these cycles the investor’s sentiments are attached with it, at different stage different
sentiments are expressed by investor.