Saturday, November 13, 2010

Herd mentality

This weeks word of the week is herd mentality. In our article the author puts forward the idea that investors following each other when investing has cost them hundreds of pounds in lost profits.
Read the Telegraph article and then discuss the following points in class or with a colleague in English.

  1. The article states that following the herd means investors often buy at the top of the market and sell at the bottom. Explain to a non financial person why this causes them a problem.
  2. Why do you think the herd mentality exists?
  3. In the article Colin Maclean is recommending buying shares in companies with overseas exposure. Why is this?
  4. Read the paragraph which starts "Robert Burdett of..." and decide what type of investment Robert is recommending. Write a short paragraph to explain his recommendation.

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