The U.S. equity bull market is in its seventh year. Many investors’ bad memories from 2008 or 2000 have faded. Some investors are feeling left behind. This week we examine the power of investor regret and why going “all in” now may not be a good idea.
Pay attention to the emotion of regret. Investors can feel acutely the pain of lost investment opportunities and seek to act on that regret. This is why many investors, having seen an investment rise in value, seek to buy that investment after it’s had its run, according to Daniel Kahneman, author of the bestseller Thinking, Fast and Slow.
Chasing Fund Performance may be hazardous to your wealth. Vanguard investment commentary looks at investors chasing performance, and why that leads to wealth erosion. Vanguard counsels a more conservative approach.
Equity markets: Still not Cheap. Relative to history, is the U.S. stock market cheap or expensive? The Economist sees a combination of cyclically-high profits, a downward trend in earnings revisions and above-average valuations. Should that be a cause of concern?
Highway to the Danger Zone: Can the Bull Market Continue? With the equity bull market in its seventh year, investors are rightly concerned about its longevity. A significant part of the gains in recent years has come from investors willing to pay more for a dollar of earnings. Stocks are no longer cheap and certain markets appear expensive. Where does that leave investors?
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J. Mark Nickell & Co.
Disclosure – The articles mentioned in This Week with J. Mark Nickell & Co. are for information and educational purposes only. They represent a sample of the numerous articles that the firm reads each week to stay current on financial and economic topics. The articles are linked to websites separate from the J. Mark Nickell & Co. website. The opinions expressed in these articles are the opinions of the author and not J. Mark Nickell & Co. This is not an offer to buy or sell any security. J. Mark Nickell & Co. is under no obligation to update any of the information in these articles. We cannot attest to the accuracy of the data in the articles.