The retail trading and investing wave

Stocks only go up! Record retail participation! An election! Volatility!

Markets are a lot of fun. But they’re only fun if you remember a few key rules:

  1. They aren’t meant to be easy
  2. You are never supposed to brag
  3. Rules 1 and 2 are entirely made up by me and you don’t have to follow them

The Nasdaq-100 is up over 20% year-to-date. The S&P 500 is about flat. We saw one of the swiftest and fastest I can remember in March and subsequently one of the fastest and most epic rips higher right after it.

People seem to forget how sudden this all happened.

Today, on the streets, you will hear more people talking about how much money they’re making or what stocks they’re watching than almost ever before. Strangely enough, no one seems to remember March.

In the good times everyone is next the Warren Buffett, bragging, boasting, and telling the world. In the bad times, everyone wonders they even invested in the first place.

In markets, our memories are only as good as the last time we could tell ourselves how great we are. Remembering that is so important. There needs to be balance. Trading and investing, after all, has similar effects on the brains as gambling.

With that being said, I am reminded of the ghosts of the past and so I leave you with a quote from an old Wall Street saying, one that has been passed around for years, and is especially relevant just coming out of the month of October:

“October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.”

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