"When everyone thinks the same way, everyone is usually wrong" - Humphrey Neil
If you ask anyone on Wall Street, they will tell you that there is no risk at all and everyone should be invested in stocks. Is it that easy? Of course, it is not that easy. Yet history would show that investors tend to think that way at the point where the market changes from a bull market to a bear market.
The highest percentage of analysts believe that there is no way we could see a bear market in 2021. That is the first time since this bull market has started that we have had so many indicators flashing red and yet no one believes the risk exists.
Take a step back to January 2020. The market looked indicator wise a lot like today. Yet, there were so many forecasters and analysts who were negative on the market. That should have been a clue that the market was not ready to change into a bear market. Sure enough, we took a brutal turn for the worst starting in February 2020 and dropped -30%. Then just as fast as we lost that amount of money, the market bounced back to new highs.
Overly unwarranted optimism by Wall Street has been present at every major change from a bull to a bear.
History has a lot to say about 2021. Tomorrow, December 15, 2020, at 4:45 I am going to give you a preview of that history lesson in my webinar Retirement in an Uncertain Times. In an easy to understand manner, I am going to go through what you need to know and what to do about it.
For the 30 minute webinar, go to www.prudentmoney.com and sign up today!