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Chasing the Market

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Chasing the Market
Entering or exiting of a trend after the trend has already been well established. Investors are often unaware of the fact that they are chasing the market which can dent the value of a portfolio. This type of investing is often seen as irrational as decisions are often based on emotion instead of careful analysis of the value of the investment.

Notes:
Chasing the market refers to both the entering into highly priced positions after they have rapidly increased and become overvalued as well as the exiting of positions after they have rapidly decreased and become undervalued. During the internet bubble some investors entered the rapidly appreciating sector well after the trend had been established and lost considerable sums when the bubble bust.


Chasing the market
Purchasing a security at a higher price than expected because prices are rapidly climbing, or selling a security at a lower level when prices are quickly falling.

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``We had lowered our price, but we were chasing the market.
With lots of cash sitting in investor accounts, money is chasing the market higher as traders don't want to miss out on their piece of the pie.
In the meantime Southampton - Amsterdam offers ten return flights every day (again with reduced services on Saturday and Sunday) from the start of the winter season on 29 October, three airlines chasing the market.
 
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