its all in your mind..!

There is nothing called absolute picture of this world. Each person is entitled to his own viewpoint. Some views may appear more intelligent and insightful but they exist only in our minds. An event may evoke different responses depending upon our state of mind. Sometimes, we often come up with different plausible explanations for certain events indicating that mind has a very important to play in modern sciences.

It has an important role to play in modern finance. For example, the very thought of boom in business cycle tempts us to overspend and this in turn fuels consumption activity resulting in higher sales for companies. It leads to improved macroeconomic figures which in turn makes us think that we are in some big time boom. This continues until this vicious cycle yields due to lot of unproductive expenditures. It causes fear psychosis whereby consumers reduce their consumption expenditure and postpone their major investments. This in turn adversely affects the sales of companies and that results in downturn and poor macroeconomic figures which makes consumers believe that economy has landed in a sharp recession. It continues till consumers begin to feel that they can no longer postpone their expenditures and the increased spending leads to optimism in the markets and this fuels the next upturn in the economy. So remember, its all in our mind..!!