Remember your first bad breakup? I bet it was painfully brutal. The weeks full of tears. The instant anger at the sight of life itself. The endless worrying if your ex was already seeing someone else. The parking outside of their house from 9 p.m. to 4 a.m. with the lights off to watch if they went anywhere (or was that just ... ahh never mind there, let's keep it moving). The point here being is that you were emotionally vulnerable. So vulnerable and raw in fact you probably took your ex back after their barrage of sweet-talk (or back in my day, after sending "143" 50 times to their translucent blue Motorola beeper). I think this is where a legion of investors enter February following a painful start to the year for markets: vulnerable. Many investors only know low interest rates (think here the sub 40-year-old crowd who has powered the market in recent years). They only know how to buy dips in stocks because the strategy has worked wonders this past decade. They only know tech stocks good (insert caveman voice), dividend-paying slower growing companies generally bad. Hence, they are vulnerable to late-in-the day rallying markets (as seen last week) blowing sweet nothings in their ear as if they were saying: "I still love you, take me back baby please." But the reality is that just like that ex, the market right now is dangerous as it works to price in anywhere from five (new Goldman Sachs call) interest hikes this year to seven (new Bank of America call). There will be a price to pay for higher interest rates as it pertains to the economy and markets, which is why stocks at present are experiencing wild volatility. Stocks are trying to figure out that price. So in my humble view, ignore the market's thirst traps it's posting into closes at the current moment. Stay disciplined during your vulnerable period. Just like your former heartbroken self, something better will come along ... in this case a better opportunity to get into stocks. Happy trading!
Submitted January 31, 2022 at 06:24AM by WallStreetDoesntBet https://ift.tt/ApMxaOYkP
