I wake up on Saturday mornings, pour a cup of my wife’s coffee (which is so strong that I believe it would rival the affect of a recreational drug) and plan on writing something of value as it relates to Insurance. After a full week of work, sometimes Insurance does not interest me so I write about something that does. Some may call this self-indulgence and I can’t disagree, but I hope, whatever the topic is, it is of value for some if not many.
Case in point, two prior posts about the Stock Market provided valuable information about analyzing the price and volume action of the Market and individual stocks. I can’t emphasize enough how important I think it is for individual investors to understand this concept. However, since the time of the most recent post (which had a “Bearish” tone), there has been a rapid V-shaped recovery. Since both posts were bearish at just the wrong time, it may be best to interpret my advice as a contrarian indicator – meaning do the exact opposite of what I recommend. Kinda like in early 2000 when you were getting stock tips from your barber and overhearing people in the checkout line at the store talk about stocks - the excessive “Bullish” sentiment (a true contrarian indicator) provided an advanced warning.
The better lesson is be flexible! Don’t act based on what you think the market should do. The market acts how it acts regardless of anyone’s expectations. Whether it is 1914 or 2014 fear and greed dictate action. Make decisions based on what you see happening not what you think will happen.
The image above is a picture from "Investors Business Daily" – one of the best resources for individual investors.
Posted by Dan Hebbeln: dan@hebbeln-ins.com