If you’re curious why I take most investment advice and the majority of news/analysis from mainstream financial media with a grain of salt, this chart might answer your doubts.
(Note: Y axis is percent increase or decrease.)
At their peak, the mania driven belief in the bubble that these investments were ironclad, bulletproof, and would never depreciate in value was so ingrained into our brains that to say anything contradictory to those beliefs would have gotten you blacklisted from most major financial circles or never invited on financial TV to speak again. In essence, you would have been labeled as a naysayer, an idiot, or a bozo who just can’t accept the new paradigm of investing in the 21st century.
Of course, after these investment bubbles popped, and you were one of few outspoken individuals brave enough to criticize them, avoid them altogether, or be so bold as to short them, mainstream media quickly flipped their position and labeled you a genius and shower you with praise (e.g. Peter Schiff on The Daily Show).
Funny, how fickle the mob really is. (Yes, I swiped this line from Gladiator!)
Unfortunately, for the retail investors like you and I, many of us aren’t sharp enough to spot the warning signs of a bubble, and fail to realize the very simple fact that when XYZ investment appreciates several fold in just 1 or 2 years, that what they’re buying isn’t an investment… it’s a trade!
As I always say, sometimes the smartest move is to make no move at all, conserve your resources, and watch how the game plays out. Then, if the opportunity presents itself, the smartest and the most savvy of investors swoop in and buy all they want when no one else wants it or they’re getting it at a discounted price once the herd has moved on to the next big thing.