Hyper-inflation?? I haven't heard much talk about inflation for quite a while now.No one knows is right but everyone has an opinion on things and I find you can get an idea of how far the market has gone up or down by the way people estimate and think of things. Right now there is a very strong opinion out there that the market will rise due to the certain high or hyper inflation to come just around the corner.
...I remember on another forum back in May 2007 everyone was bragging about how great the banks were and you can't lose and I will enjoy and keep buying and on and on and blah, blah. Well that told me I had better watch out because banks could be way overbought and a good correction could be coming and of course it did. Of course last year I was a victim of my own overconfidence that the market should fall off a cliff in the face of a lot of company betting the same way I was. September of this year most were on the side of correction and the opposite happened. If you would have asked everyone their opinion on market direction in August most may have said down for September.
Stop losses are not the answer, lol. They may help, but in a market panic your stock prices will be plunging through those stops like they weren't even there.When you invest in the stock market, you have to be prepared for any number of so-called 'Black Swan' events that can out of left field when you aren't looking and send the markets into a sudden dive.
For example, if a terrorist sets off a nuclear device in a large American city that kills thousands of people. Obama recently said that is what he worries about the most.
Anyone care to predict how the markets would perform if that scenario ever came to pass?
It's a dangerous and uncertain world out there.
Stop losses are one answer.