Fear, Greed, and the Emotional Roller Coaster of Investing
Investing isn’t just about numbers, charts, and strategies—it may also be considered a psychological battlefield. Fear and greed are two of the most powerful emotions driving market movements, influencing investor decisions in ways that may potentially lead to costly mistakes. Understanding these emotions and learning how to manage them is key in today’s stock market.
One way to take emotions out of the equation? A disciplined investment approach like Stratified ETFs strategy of equal sector weighting, which aims to bring balance to your equity portfolio, potentially keeping your emotions steady through market ups and downs.
Fear and Greed: The Twin Forces of the Market
The Fear Factor
Fear manifests in various ways, from panic selling during a market dip to sitting on the sidelines, afraid to invest at all. Investors gripped by fear tend to:
- Sell at the worst possible times, often during a downturn when prices are low.
- Miss out on potential gains by waiting for the “perfect” moment to invest.
- Overreact to short-term market noise instead of focusing on long-term fundamentals.
A classic example? The 2008 financial crisis. Many investors liquidated their portfolios in fear, only to miss out on one of the longest bull markets in history.
The Greed Trap
Greed, on the other hand, pushes investors to chase quick gains, often leading to risky behaviors such as:
- FOMO (Fear of Missing Out) – Buying into hype-driven stocks at inflated prices.
- Over-concentration – Loading up on a few high-flying stocks, ignoring diversification.
- Ignoring Risk – Underestimating potential losses when the market turns.
We saw this during the dot-com bubble, when investors piled into internet stocks with little regard for valuation—only to see the bubble burst.
Walking the Line Between Fear and Greed
Since completely eliminating emotions is impossible, a more appealing strategy seeks to manage them. This is where the Stratified LargeCap Index ETF (SSPY) and Stratified LargeCap Hedged ETF (SHUS) come in.
How SSPY & SHUS May Help You Stay Disciplined
✓ Sector Equal Weighting – Traditional ETFs tend to give more weight to the biggest companies, often leading to concentration risk. SSPY & SHUS seek to distribute investments evenly across sectors.
✓ Built-in Diversification – Instead of being driven by a handful of overvalued stocks, these ETFs aim to spread exposure across multiple industries and business models.
✓ Systematic Rebalancing – Rather than reacting emotionally to market movements, SSPY & SHUS follow a disciplined approach to rebalancing, helping investors avoid the pitfalls of performance-chasing or panic-selling.
✓ Hedged Exposure (SHUS) – For those seeking an extra layer of risk management, SHUS incorporates a hedging component, potentially helping to cushion against downturns while staying invested.
Keep Emotions in Check, Keep Investing on Track
Fear and greed will always exist in the markets, but your investment strategy doesn’t have to be ruled by them. By considering a structured approach—like investing in the Stratified ETFs—you seek to remove emotional biases, stay diversified, and navigate market volatility.
Because in investing, we believe the best decisions are often the ones you don’t have to overthink.
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Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call (866) 972-4492 or visit our website at https://stratifiedfunds.com/investor-materials. Read the prospectus or summary prospectus carefully before investing.
The Funds are distributed by Foreside Fund Services, LLC. Exchange Traded Concepts, LLC serves as the investment advisor. Foreside Fund Services, LLC. is not affiliated with Exchange Traded Concepts, LLC or any of its affiliates.
Investing involves risk, including loss of principal. The Funds are subject to certain other risks, including but not limited to, equity securities risk, large-capitalization risk, index tracking risk, passive strategy/index risk, and market trading risk. Investing involves risk, including possible loss of principal. There can be no guarantee the Fund will meet its investment objectives.
SSPY Risks: The Fund is subject to certain other risks, including but not limited to, equity securities risk, large-capitalization risk, index tracking risk, passive strategy/index risk, and market trading risk. Investing involves risk, including possible loss of principal.
SHUS Risks: The Fund is actively managed using a proprietary process, and there can be no guarantee that the Fund's investment strategies will be successful. The Fund may invest in Underlying Funds or Securities that are managed with a passive investment strategy, attempting to track the performance of an unmanaged index of securities. This differs from an actively-managed fund, which typically seeks to outperform a benchmark index. Maintaining investments in securities regardless of their individual performance or market conditions could negatively affect the Fund's return. The Fund is subject to certain other risks, including but not limited to, equity securities risk, large-, mid-, and small-capitalization risk, and market trading risk. Investing in securities of small and mid-sized companies may involve greater volatility than investing in larger and more established companies. Certain investments may be subject to restrictions on resale, trade over-the-counter or in limited volume, or lack an active trading market. Purchased put options may expire worthless and may have imperfect correlation to the value of the Fund’s sector based investments. Written call and put options may limit the Fund’s participation in equity market gains and may amplify losses in market declines. The Fund’s losses are potentially large in a written put or call transaction. If unhedged, written calls expose the Fund to potentially unlimited losses. The Fund invests in derivatives. Derivatives are financial instruments that derive their performance from an underlying reference asset, such as an index. The return on a derivative instrument may not correlate with the return of its underlying reference asset. Derivatives can be volatile and may be less liquid than other securities.
Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Investors may purchase or sell individual shares on an exchange on which they are listed. Market returns are based upon the midpoint of the bid/ask spread at 4:00 p.m. Eastern time (when NAV is normally determined for most ETFs), and do not represent the returns you would receive if you traded shares at other times. Please see the prospectus for more details.
The Syntax Stratified LargeCap Index™ is the property of Syntax, LLC, which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) to calculate and maintain the Index. The Index is not sponsored by S&P Dow Jones Indices or its affiliates or its third-party licensors (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices will not be liable for any errors or omissions in calculating the Index. “Calculated by S&P Dow Jones Indices” and the related stylized mark(s) are service marks of S&P Dow Jones Indices and have been licensed for use by Syntax, LLC, the parent company of Syntax Advisors, LLC. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“SPFS”), and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”).
The Syntax Stratified LargeCap Index™ is the property of Syntax, LLC, the Fund’s index provider. Syntax®, Stratified®, Stratified Indices®, Stratified Weight™, and FIS™ are trademarks or registered trademarks of Locus LP. Performance of an index is not illustrative of any particular investment. It is not possible to invest directly in an index.
Stratified Weight™ is the weighting methodology by which Syntax diversifies an index’s constituent companies that share “Related Business Risks.” Related Business Risk occurs when two or more companies provide similar products and/or services or share economic relationships such as having common suppliers, customers or competitors. The process of identifying, grouping, and diversifying holdings across Related Business Risk groups within an index is called stratification, and was designed by Syntax to seek to correct for business risk concentrations that regularly occur in capitalization-weighted indices and equal-weighted indices.
The Stratified Hedged Strategy combines the benefits of exposure to a Stratified Weight™ equity portfolio with a rules-based protection program managed by Exchange Traded Concepts to reduce the risk of losses due to market downturns.
Diversification does not ensure a profit or guarantee against a loss.
The S&P 500® Index is a market-capitalization-weighted index of the 500 leading publicly traded companies in the U.S.
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