| | | | If you’re like me, the last week has been pretty nice.
It’s a lot easier to make positive returns when the entire market is ripping higher – who knew?
But the obvious question is whether we will continue on this path or make a correction… And the more important question is: When?
Now, this is where the crystal ball I don’t have would really come in handy.
I’d love for this newsletter to be a guide on how to pick tops and bottoms, but unfortunately I don’t believe that’s possible.
But I do think these moments are what separate the folks who do really well in the markets vs those who don’t.
Because, just like a downside move, a big upside move tests your nerves.
“Is it overbought?”
“Do I get out?”
“If I am not fully deployed, do I chase it?”
All those questions come flooding in.
And most people make the decision on some intersection of “fear” and “greed”...
Neither is a great way to make a decision.
So let me just offer you two pieces of advice that I think are more objective and can serve you well in this environment:
1. Use Momentum
2. Zoom Out
You’ve probably heard me give both of these pieces of advice before, but I think they’re worth noting again.
In a market like this, I really believe momentum is king.
The pushback I get on that is that the market will eventually drop. Of course that’s true and I’ll take some hits along the way… But I won’t miss the “meat” in the middle.
Gold is a perfect example.
I’ve been long gold since last year when it broke out.
It got “overextended” six months ago and I ignored it and followed momentum.
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