Rising markets tend to give out euphoric highs. Everybody wants to be in so that they don’t miss any of the fun and froth in every trade. Trends guide investment behaviour. Going against the trend looks increasingly difficult. Slowly, even the naysayers give up and join the party. The euphoria rises to a crescendo moment when nobody is left out. When everybody is in, the market gets its consensus moment and is pregnant for an event. That is precisely when the water breaks and the bear comes out.
This time will be no different. What seems tough to read is the exact moment when the tide will turn. But, to the discerning and cautious investor, that is immaterial. What is most important is safety. Bringing safety into one’s investing is paramount, and that will impact the portfolio health for a very long time. This is hardly easy. If you leave the party early, you will look silly for some time. But that will be followed by a long period of stability and peace in your investing. The choice is neither hard to make nor easy to follow.