Commitment phobia is not unheard of and although there may be a lot of people denying the fact, it is but a psychological effect. There are various sectors in the business investment sphere where investors fear to make an investment. Here we will try to analyze a few scenarios where investors think twice before making a commitment. A lot of investors are looking to invest their capital in new start-ups in order to make their start ups more flexible. They want to investing stocks and in cash. However, the current …show more content…
It is quite helpful. Consider the case of the stock market. When they seem to rise, everyone is positive and investors continue to enjoy as the value of their portfolio increments. This influences the mind to believe that your one track decisions are working out for the best. You are inclined to follow the same decisions. The same market crashes and when the stocks see a decline, you are at a critical stage. You fear making further commitments to stoc. You want to invest more in cash,. You get derailed from the fact that stocks will have outlasting value as compared to cash which will have no value once recession hits in. The consequences are very predictable. Lot of the investors will immediately sell their stocks to get hold of cash. Thus, Capitulation sets in place and soon this creates a high volume and lower prices in the stock