Balancing FOMO and the inevitable correction/bubble burst.

by walnuts24

I have been investing since 2008 when I was in college and recognized a unique opportunity and realized that my $5,000 savings was not much compared to my future earnings. So I dumped my money into WF and turned it into about $15k in a year. Since about 2011, I have been investing in mainly ETF index funds with the occasional individual stock. I have a 401K thru work that invests in 2 separate index funds where about half my money is. Another 25% is in IRAs that I use to actively trade individual stocks and another 25% is in a brokerage account where I had a few ETF (ARKK and VB) and a mutual fund. Last year all my accounts performed well, especially my IRA due to some lucky trade timing. My 2020 return was about 30% overall. However, early this week I sold a bunch of assets in my IRA and brokerage account and am sitting on about 40% cash. Only holding ARKK and the funds in my 401K.

Question is, is anyone else struggling to balance the FOMO on this crazy overvalued momentum swing versus a belief that an inevitable correction is going to occur? I am paralyzed in deciding to get back in because when I look at all these fundamentals none of it is making sense. That doesn’t even account for the elephant in the room of the impact all this stimulus may have by causing potential hyperinflation. My strategy has always been to sell when valuations become absurd. Historically I have always been able to find other value and buy back in. Now I am struggling because it seems like everything is overvalued.

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Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.

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