Don't Confuse Brains With a Bull Market
Here we are at the end of the first week of 2021 and stocks continue to be on an absolute tear. Not even a riot on Capital Hill could deter the buying.
Confidence among investors and traders is sky high. And why wouldn't it be? Just look at the returns across the major sectors the last six months...
And that's only the sector action. If we drill down into specific industries it gets even better. The below list only includes industries that were up 50% or better...
Now that's what I call a bull market. Everyone's a winner. And the above doesn't even include Bitcoin or the craziness going on in the small cap crypto/blockchain stocks.
I'm having an absolute blast trading this market and I hope it continues. Unfortunately, all good things come to an end and those that lose the least when the music stops, end up being the real winners.
I have no idea what brings this market down and when. No one does. I do know that there will be a "dip" that gets bought for the umpteenth time that ends up not being a dip but the beginning of a major correction. But then again, does that really matter? We saw one big dip in March that brought out Davey Day Trader and the Robinhood traders. There's just no fear, even when things get ugly. Or so it seems.
But hey, everyone is entitled to get in there and mix it up. Young and old. Why not? There's no shortage of opportunities that's for sure.
However, one thing that I'm noticing is there are a lot of geniuses out there. I mean a lot. Have you been on FinTwit lately? I've actually started seeing the "it's different this time" quote. Uh oh.
Also, while very entertaining but a bit concerning are Gen Z on TikTok doling out advice and some even charging for it. Yikes. Something to keep in mind before putting that line of credit to work.
I think it's great that people are taking control of their investments. At least they aren't handing it over to a mutual fund salesperson or planner selling under-performing funds that charge 2% or more. Win or lose they will increase their investing IQ with some real market experience.
I'll keep trading this market and riding the trends according to my rules built from 20 years of battle-hardened experience. But I'm not blind to what type of environment I'm operating in. I know first hand to never confuse brains with a bull market.
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