The things you think about. The things you believe. The things you read and watch. The things that make you confident and the things that make you fearful are the very foundation of wealth generation–on a lot of levels.
The pricing of stocks and other assets reflect beliefs about their value. These beliefs aren’t just the thoughts and opinions of analysts and big-time market movers, they reflect your ideas, too. Now, your personal belief may just represent a fraction of that price, but when merged with the collective sense, you have mass market psychology.
On the micro-level, this belief influences the price of individual stocks. This then can turn into movement at the macro level as your beliefs connect and interact with other beliefs.
How Markets Use Information To Set Prices
The Use of Contingent Contracts