More market talk

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It's amazing what blade can write up in the same time it takes me to sum up my BS argument...

My investment horizon is long and i'm doing a very bold strategy while i know exactly what i'm risking.

it's only stupid or "idiotic" if it DOESN'T WORK. ;)

Just realize that you may be missing out on massive upside. Perhaps put a chunk of your cash into a conservative asset allocation, then exchange in parts or in whole for a more aggressive (equity heavy) one when the market turns. But, waiting for the market to turn could take a very long time in which case you will be missing on on a lot with zero equity exposure.

At least you admit you don't know and are taking risks. Nobody does, but you can look at historical data and read what other successful and knowledgable investors put in writing. Many such books have been described on any number of posts.

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I think this is highly appropriate. Literally, the definition of rebalancing.

The reason some find it "difficult" is that many investors find it very hard to sell assets which have been performing (the key word being "been"). Rebalancing, theoretically, allows you to sell high and buy low......

The term that you are looking for is behavioral finance. The most recent Nobel prize in Economics went to Richard Thaler, who is a pioneer in this field.
 
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So Cramer has started asking people why they don't like the market. So far, he's been met with a cacophony of eye-opening answers.

"I'd say about a third of them tell me, 'I'm just not interested because it's too dangerous,'" the "Mad Money" host said.

Most of those people told Cramer that they lost everything in the 2008 financial crisis or the 2000 dotcom crash and would rather keep cash than invest in stocks.

"[It's] pretty amazing given how poorly cash has done versus stocks. The risk aversion is tremendous," he said.

Cramer has also heard from people who have been waiting for ages for a pullback and say they "missed the rally." A third group told Cramer that they didn't invest because of politics.

The fourth reason Cramer has heard is that people can't afford to invest in the stock market, despite Cramer's advice to start with small investments and build on their gains.

"The belief that only the rich own stocks and make money in them because the market's rigged against the little guy is a pretty constant refrain," the "Mad Money" host said.

All in all, Cramer has not ignored the trajectory of this rally. With the exception of the drug stocks, the consumer foods plays and the retailers, the bull market has been surging. But he has noticed that the sentiment doesn't match the gains.

"I believe that as long as people are incredulous or disdainful or scared of this market ... then there's trillions of dollars of tinder on the sidelines that can come in and take stocks higher," Cramer concluded. "And that process is pretty self-fulfilling; as they take stocks up, their old memories of the bad times disappear [and] new ones are created based on a better economy and a realization that the stock market, and even the most obvious of companies as plain as the nose on my face, can make you a heck of a lot more money than any other asset class under the sun."


Cramer explains why a lack of enthusiasm about investing is 'wonderful' for the market
 
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Just realize that you may be missing out on massive upside. Perhaps put a chunk of your cash into a conservative asset allocation, then exchange in parts or in whole for a more aggressive (equity heavy) one when the market turns. But, waiting for the market to turn could take a very long time in which case you will be missing on on a lot with zero equity exposure.

At least you admit you don't know and are taking risks. Nobody does, but you can look at historical data and read what other successful and knowledgable investors put in writing. Many such books have been described on any number of posts.

Ofc, there is def a chance that i'm missing out on a massive upside. But if i believe this chance is much lower than the possibility that i will avoid a huge down swing, my strategy all of a sudden makes sense. I think we are all logical people, but we disagree on the premise.
 
Ofc, there is def a chance that i'm missing out on a massive upside. But if i believe this chance is much lower than the possibility that i will avoid a huge down swing, my strategy all of a sudden makes sense. I think we are all logical people, but we disagree on the premise.

Hey man. I do not presume that I will turn out to be any better an investor than you. Frankly, I think hubris relative to the markets is the real enemy. I do have my go-to gurus such as Jack Bogle, William Bernstein, Rick Edelman, Burton Malkiel, Warren Buffett, and even Benjamin Graham. I think these guys have given very good advise.
 
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