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The Stock Market is in a Bubble

Doesn’t it seem like we’re always in a bubble. The worst part is the experts say when the bubble pops it’s going to be really bad. They don’t tell you when or how bad. They just like to make sure if you’re going to buy stocks, then you might want to buy brand new underwear.

A stock market bubble is tricky because when you’re in it every moment is occupied by thoughts like this is great, I can’t believe my stock goes up every day and I’m out once I get all my money from the last crash. Not making that mistake again. Right.

bubble

Then there is the people who know there is a bubble, but are too afraid to jump in. So they sit on the sidelines with a face like they just discovered lemon for the first time. They warn stocks just can’t keep on going up. But every day they do.

The Straight Dope – Yes we are in a bubble. Best way to approach this is to dollar cost average until the thing looks like it is going to pop. Once you sell be happy with what you got.

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Don’t Be Scared of The Market


Taking a loss on a stock really hurts. When you finally commit to selling that loser it gives you pain. Around double the amount compared to the good feelings from a gain. That’s like laying down on the tracks and
letting the train roll over you twice. Nobody likes that.

But it’s those negative emotions that can keep us from getting into the market in the first place. Especially when everybody says the market is up to much. Well, I read a great book recently “Markets never forget (but people do) ” and we tend to miss a gain worrying about a potential loss.

The market is up 2/3 of the time. Probability says if you are scared about a drop eventually you will be right. But you are also going to be poor.

ronco

In the great wise words of Ron Popeil sometimes it is worth it to
“Set it and Forget it.”

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The January Effect

Now that January is over, everybody in the stock market can agree…that pretty much sucked.  Not just a little but a whole lot.  The scary thing is Wall Street believes if January is down, then there is more to come.  You may want a good year, but it’s not going to happen

The rule of Wall Street is to buy low and sell high.  Anybody not willing to sell now must not be able to hear the fat lady sing.  In fact, I believe she is getting a little hoarse  But if you are not a fan of ladies then you are probably not a fan of bears, bulls or turtles.  Your investment style probably matches more like an ostrich.

ostrich

The straight dope:  We all know the market doesn’t listen to the calendar it listens to old white dudes.  I think those old white dudes are calling for a sell.  My program triggered DJIA sell at 16374 on 1/14/14.