What do stocks at “all-time highs” REALLY mean?

Stocks at record highs

What do stocks at all-time highs mean for you?

MarketWatch was careful to cover all bases this morning. Take a look at these three headlines that they posted all within an hour of each other:

 

MarketWatch 13667788_10104734385096147_5455058271198162375_o 13613207_10104734385345647_5265477481214828524_o

Stocks at all time highs are either:

  1. The Best Thing Ever!
  2. The Worst Thing Ever!
  3. Just a thing, proceed with caution.

So what does this mean for people like me and you? First, don’t cater your investment strategies to headlines. If you read enough articles you will find many that agree with you or believe the exact opposite.

I like MarketWatch a lot, but their job is to get clicks. Your job is to make money.

If you don’t have enough time to read everything, then it can actually be better if you read nothing. Or else you might get caught up in headline porn and do something irrational like sell an investment you were supposed to hold onto for 20 years.

Great piece of advice comes from Charlie Munger’s investing checklist:

Mimicking the herd invites regression to the mean.

This means if you invest based on headlines and follow the crowds, the best you will every achieve are mediocre returns.

So don’t get too high on yourself when you see green and don’t get too low when you see red.

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