Somewhere In Between

 THE PENDULUM OF INVESTING & EMOTION

Everytime the financial markets go down we only believe the bear cases and tend to act on them. We ignore the bull cases. When markets go up we only believe the bull cases and tend to act on them, ignoring the arguments and warnings by the bear camp.

"This time is different" can be interpreted two ways. First, we ignore warning bells in order to justify continuing to buy into a bull run after a huge run up, whether it be Gold (1980), Stocks (2000) or Housing (2006). But, we also can interpret it as meaning "this time it really will crash" just because it feels so bad while "it" is correcting. Actual financial bubbles are quite rare.

The truth always lies somewhere in the middle, after the Pendulum has stopped swinging. Just stick to your plan and ignore the "noise".

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