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By Leon Gettler, Talking Business >>
MARKETS have become so volatile with the Middle East in turmoil over oil and the Strait of Hormuz.
How should people invest?
Dale Gillham, professional trader and chief analyst at WealthWithin said people need to think long term about potential investments.
He also said the current nervousness in the market created opportunities for people to get in at better prices.
“I just think the current situation around the world was creating that nervousness but that also creates exactly the opposite,” Mr Gillham told Talking Business. 
“It creates a lot of opportunity for people to get into some really good stocks at better prices. So once things have settled down, they’ll be able to take of that.”
Psychology and investment attitudes are key
Mr Gillham said he had been mentoring and teaching investment for three decades and most investor success comes down to investor psychology and investor behaviour.
“It’s not about skill in analysing the next stock,” Mr Gillham said. “It’s about their actions when the market is very volatile or very uncertain and it’s also (about) their actions when the market is very bullish
“One thing I know is markets change, volatility changes but human behaviour doesn’t change and human behaviour determines whether we make money out of the stock market or we don’t.”
Mr Gillham said people have to think long term when it comes to investing “but we are now becoming short term thinkers”.
“I’m seeing a lot more people, especially since the turn of the century, they’re getting a lot more algorithms and AI,” he said.
“They’re armed with smart phones that can give you every single thing you need on the planet, with red and green buttons and gamifying the stock market.
“It’s creating that short term vision.
“Most people I’m meeting at the moment, they’re looking at small micro-cap stocks, very illiquid stocks with the false view that they’ll make a lot of money quickly on those stocks but what they don’t understand is that the percentage chance of them getting it right, especially with little knowledge and experience in the stock market is they’ll get it wrong 99% or probably 99.9% of the time.”
Stock investing: don’t follow the herd
Mr Gillham said the stock market generally has a big move very 54 years – from low to high to low. We saw that in 1929, we saw that in the 1987 crash.
He said if you’re following the crowd, you’re going the wrong way when it comes to the stock market.
Mr Gillham said one prime example of that is the way investors piled into Bitcoin before it plummeted.
“Every single man, woman, dog and child is talking about Bitcoin,” he said.
“They were borrowing money to buy Bitcoin and it crashed in three months.”
He said the key rule is that “when taxi drivers are giving you stock tips, get out”.
Mr Gillham said he had seen it so many times over the last few years, including the 1987 crash and the Global Financial Crisis (GFC) crash.
“I’ve studied our Australian stock market back to 1875 and the Dow back to 1900 and human psychology does not change ever,” he said.
“Fear and greed runs the market.” 
Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness
https://shows.acast.com/talkingbusiness/episodes/talking-business-14-interview-with-dale-gilham-from-wealthwi
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