Last year, it was all about whether Greece would continue to remain a part of Eurozone. The event (or the speculation of the event), popularly known as Grexit caused a lot of anxiety in the financial markets the world over. Around this time last year, people started forgetting the same.
This year, we are struggling with another speculation – Brexit. Will Britain exit Eurozone? While the decision is yet to be taken about the same, the markets are already nervous.
And while the world was debating about Brexit, we got a different exit, this time from a central banker. The Governor of Reserve Bank of India, Mr. Raghuram Rajan announced on Friday last week that he would go back to academia once his current term as Governor RBI gets over in September 2016.
We were very quick to coin the term for this exit – Rexit.
See the pattern – all these words sound so similar: Grexit – Brexit – Rexit. Our brains start to interpret such events as having similar outcomes. Read one of our blog posts on similar lines. Grouping the investment themes – a mental short cut. We love to take mental short cuts.
Biology says, the brain uses maximum energy and hence tries to conserve the same by taking short cuts.
Such short cuts invoke a fear and Grexit – Brexit – Rexit may trigger Investorexit from the markets.
Go back and read the blog we just referred to.
#RidingTheRollerCoaster – 186