Investing is the intersection of economics and psychology. –Seth Klarman
The complete absence of fear is the perfect setting for the advent of fear. When markets believe it is going one way up, volatility tends to dip. The lack of two way fluctuations make the markets appear infallible. This is when money is invested at the fastest pace into equity. The demand for equity rises so much that stock prices move up across the spectrum. Just like all boats rise in a high tide. Investors think only of buying and fail to create cash that could be used to buy on dips. Progressively, investors end up selling better stocks they owned for long years and buying stocks they barely discovered. Decision making is often hasty and unreliable. Investors would do well to pause and think defensive.