Trust Your Fundamental Analysis and Ignore the FOMO
I invested in the Ibovespa-tracking index EWZ which very closely mimics the overall price action of Brazil’s benchmark equity index. While I did initially lock in some profits, I ended up losing some on that particular trade because I ignored my gut instinct: to stay away from emerging markets in 2019.
I saw EWZ rally up a storm on the back of optimism about the prospect of key structural reforms being passed and I kept thinking “I should try to catch this wave” before it ends. As it happens, I picked the top of the uptrend and incurred a double-digit loss. While I was (and still am) up for the year, it taught me valuable lesson: trust your fundamental analysis and ignore the insidious pull of FOMO.
--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter
