As you know, I love making fun of people who get overly stressed about tiny things. Don’t we all know someone like that? For example: the student who obsesses about the half-point that he lost on a test, or the co-worker who stays late in the office to churn out a report that nobody reads.

And when it comes to investments, I’m talking about the traders, the economists, the talking heads on CNBC, most retail investors, and pretty much anyone clueless about behavioral finance.

How Clueless People React to the Market

The past couple of months have been crazy for the stock market. Everyone speculated if the Federal Reserve was going to “taper” its bond purchases. The NASDAQ suffered a technical glitch that halted trading for three hours. The US Government shut down this week. Back home, the Straits Times Index (STI) dropped steadily for months, zoomed up, and ...