Euphoria. It’s always been a favorite emotion of mine, and it’s a hard thing for anyone to walk away from. Nevertheless, if you’re a serious long-term investor, you know that it’s the most dangerous emotion the market can serve up. Take a look at the stocks in your portfolio. How many of them are down, ytd? If you only own a few stocks, the answer is probably zero. Even if you own a great many, the answer is almost certainly very, very few.
Some of you, new to investing, are thinking you’ve finally grown brilliant, and who knows, maybe you have. Maybe your recent studies have given you deeper insight than ever before into how the stock market works, or maybe those brain pills you ordered online are finally kicking in. But even if one or both of those things are true, that’s not why your stocks are going up.
Your stocks are going up because everything is going up, and yes, that’s the defining characteristic of stock market euphoria. I realize that nearly everyone reading this is going to be reluctant to jump out of stocks right now, and I can certainly sympathize; the S&P 500 is racing toward a new high like it that’s it’s manifest destiny, and even if the stock market corrects, it will just un-correct when it’s done.
Unless, of course, you get stuck in true losers, such as, perhaps, the ones on today’s list. These may never come back.
As always, consider these ideas to be just that, ideas, and do your own research before making any move on the stock market.