I just feel now is a good time to pull out one of my favorite Wall Street adages….” Never confuse a bull market with brains.”
This market has been on a heck of a run, and the election results seemed to kick the rally into high gear. That’s great. Regardless of who you voted for, we all like seeing our money grow. But, it is during times like these that many Investors and Advisors alike start thinking that it is their incredible skill that is driving up their portfolio value. I promise you, with rare exception it is not. In fact, our brains are probably more of a detriment to our portfolios than anything.
Unfortunately, this type of thinking WILL lead to excessive risk taking, complacency and over-confidence. Those tendencies lead to the ultimate demise of a bull market…or at least a pause.
Trust me, I’m writing this to remind myself of this truth as well. A rising tide lifts all boats. None of us are market geniuses. Stay disciplined. Rebalance your portfolio. Possibly consider taking profits in any highly speculative positions you may have. The good times will not last forever.
By no means am I ringing the bell suggesting the end is near. Things are pretty good out there, at least for stock investors. Enjoy it. Just be careful not to take too much credit, because if you do, you’ll have to take blame during the next downturn.
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