I'm always of the opinion that the market will move in the direction that will piss off the most people. Unfortunately, I don't practice what I preach enough, and I find myself getting suckered into the upward momentum, especially over the last few months. With the market at such depressed levels, there are a lot of great bargains staring us right in the face...too many bargains. So when you think that we might have hit a bottom, it's easy to conclude that you must buy more. Unfortunately there are more important macro forces in the economy that are hacking away at the available pool of funds for the market. Individual investor interest in the market has got to be at an all-time high, and if you think about the squeeze that is being put on the average consumer these days, doesn't it make you think that less cash will be available for allocation toward stocks? So in the absence of a fundamental motivator (e.g. tax cut, rate cut, etc), I'm cautiously optimistic at best about a sustainable bounce. What we have to do is overcome our fear of letting a stock go on a short term rise. Seems like they always come back down these days.
It's hard sometimes to get yourself out of the rut of the long term investor.
-B (in the rut) |
