Markets are hitting new highs. So is bull market anxiety. Here’s a look at three common thoughts sowing doubt right now (and how to shake them).
May was one of the best months ever for our swing trading portfolio. We had several massive wins – and we weren’t the only ones who did. But I noticed that even while traders are celebrating wins, they are also worried.
If you cannot shake the anxiety associated with this bull market, this post is for you.
3 thoughts causing bull market anxiety
This is the wrong time to be in the markets
Traders are doubting just about everything right now, mostly due to lurking volatility. That’s understandable.
However, their doubts are getting in the way of participating in the bull market. They doubt markets will continue to go up, doubt the market will stabilize, doubt the news will be positive enough to keep the bears at bay.
Zoom out and look at the big picture. Markets consistently move up and to the right.
So, why would you not be invested in the stock market right now? I always have some investments or trades working, no matter what the markets are doing. What changes is how much I have invested at any one time.
I also take profits when I have them, so that when a bull rally (such as this one) ends, I’ll be able to sleep at night.
Pullbacks and corrections are the end of the world
If you listen to the financial media right now, all they are talking about is how worried investors are about a pullback or correction. Instead of celebrating new highs, it seems the media is just waiting for the markets to spiral downward.
Well, guess what? Bull markets don’t last forever. Markets will drop.
But again, just look at long-term trends. A brief pullback or bigger correction is not the end of the world. The markets have retreated thousands of times in the past 100 years. And yet they continue to steadily climb higher.
I like to think of a pullback like one dark grain of sand on the beach. It blends in with the white and beige grains and is barely recognizable.
I’ll never book another winning trade
For those sitting on the sidelines right now, it probably feels like you have completely missed out. No more winning trades, your portfolio will remain as-is forever.
Nonsense.
The market is constantly providing opportunities to place and book another winning trade. Missing out on winning trades during a single bull rally will not destroy your wealth.
And you can still get in on trades! Look at a stock chart or index that is making higher highs and higher lows. It is creating many interim tops along the way.
Ride this trend – don’t overthink it
The odds of spotting the exact top of a bull market are not very good. It is best to ignore the media and ride out the trend. Watch the price action. Once it changes, you know it’s time to hit the sell button.
