Put these charts on your wall for reference the next time you think…
Something is “oversold” or “at support” and has to go back up…
Something is “overbought” and has to go back down…
It can’t go to 0…
It is certain to default…
Interest rates can’t possibly go any lower…
Interest rates can’t possibly go any higher…
Housing prices only go up…
Valuation is a good reason to short something…
You can call a bubble/top without the benefit of hindsight…
You’re waiting for a correction to buy in at a lower price…
Volatility can’t possibly go any higher…
The Fed can prevent the stock market from going down…
Value investing is easy…
Following pundits/gurus is an effective investment strategy…
They say a picture is worth a thousand words but in investing it is worth so much more. Having a few extreme charts on your wall can be a helpful reminder that there is no such thing as “can’t”, “won’t,” or “has to” in markets. The market doesn’t have to do anything, and certainly not what you think it “should” do. The market doesn’t abide by any hard and fast rules; it does what it wants to do and when it wants to do it.
