To start with, investors are over-confident, and think that they are better at making choices than they really are. They believe in winning streaks and are impressed by short-term success. They confuse familiarity with real knowledge, and over-react to both good and bad news. Worse most of them are trapped in a cycle of fear and greed. When the market goes up, they are desperate to rake in more then their neighbours. When it falls, they become convinced that it will never recover. - Quote from the Economist in regards to study of behavior finance.