Capital Market commentators around the world in recent years devote extensive articles explaining movements in the market according to psychological motives, stemming most from the international virtual community. Fashionable trends have become more legitimate than rational considerations, because they motivate the human creativity. Thus the concept of "dream companies", with their name creating more value than the products they sell, as brands in fashion, which besides the name on top of the product have no difference from similar companies.
So it is strange that many commentators of the capital markets do not attach to the Fed's decision about raising interest rates the same ''trendy'' meaning .
If the common investors are affected by ''trendy'' when buying and selling shares, they are influenced by the "trendy" just the same when the Fed raises interest rates. In other words, the small interest rate hike, if there is one at all, has great significance much more than its actual value.
Many stock investments with the "facade fantasy" will disappear. Many investors will sell their shares in the coming days, in order to ride on the wave of "dream of falling", which has a strong psychological meaning almost like the "dream of rising".
We are expecting a sharp decline in the indices of the US equity market, which will be ruthless, long, and difficult to repair.
It is possible, by the way, to also assume, according to the principle of "dream decision", that the motives of the members of the Fed regarding interest rate hike were not rational, but stemmed more from the need to belong and take part in some way, even if negative, in the dreams created by the stock market. May the Fed's force be with you!
