How High is Too High? 1.16.18
Posted on January 16, 2018
How high is too high? Are the charts looking a little parabolic? A little unsustainable? Am I getting a little anxious? A little emotional? These are questions adderessed by 'behaviorial finance' and a portfolio manager should be WELL ACQUAINTED with the topic...either emperically or academically...because these emotions are starting to impact a lot of people. But be of good cheer, you have the Signals; you have their Momentum and the appropriate levels of Exposure. You have the ability to discern intermarket signals for more or less confirmation and you have STOPS for every stock, ETF or Mutual Fund followed in the system. And these stop-loss signals are dynamic, flexing to the volatility of any asset class. You'll never sell the high or buy the low so just plug that into your psychology. Let the Signals keep you calm under pressure and confident in your system. We're going to hit a high pretty soon and we're going to correct and your portfolio value will go down but just execute your pre-planned strategy and go on with your life. The algos will give you portfolio protection and get you long again when odds favor a renewed uptrend. Good plan. Better than playing to your emotions that will almost surely result in a loss. Use your 'sound mind' and don't let your emotions rule. 'Keep calm and carry on.'