Unlike the future, the present is knowable. What is not knowable is when the trend will turn. In stock market it is impossible to do right thing at right time. But The benefit of recognizing where we stand in the trend is that it enables us to take appropriate action. Rich returns make the investors less afraid of losing money than missing out of fat gains. In these conditions we should lower our expectations and proceed with caution. What does that entail in practical terms? I am not saying to exit but it might involve shifting from highly overvalued stock to less aggressive stock or making sure that we won’t need liquidity in the event of trend reversal. We can’t control the market but we can control our response.
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