Don’t Count on Humans to be Rational
Two recent news bits reinforced my observation that people behave in ways that often can be considered irrational.
Item 1: An online story I read last week about a real estate survey that indicated, in today’s market, buyers have a significantly higher opinion of the agent who represents them than sellers have of their agent. The implicit message here is that, subconsciously, sellers associate their disadvantaged position in this market with their agent, as though real estate licensees create and control the economy.
Item 2: The stock market today, in anticipation of the Federal Reserve’s meeting, was down about 1.2 per cent (S&P 500). Soon after the announcement that the Fed was maintaining fed funds rate at almost zero, the main tool in its box to stimulate the economy, the S&P gained back almost one per cent. Amazing, given today’s Fed announcement that the U.S. economy is weakening and this was a very negative report.
If you are an actual or potential real estate buyer or seller, do yourself a favor. Don’t follow the crowd. Rely on your own critical thinking and you will end up better off than most.