Newbie's Blog: Running with the Herd

I guess since it's earnings season, it is an opportune time to write this. Not only for you to read but it serves as a reminder.

A reminder that the market is cyclical and despite stocks hitting new highs (heck, even the S&P500 has hit a new high in a few years), it would be prudent to remember not to run with the herd. It has been reported that tech stocks have grown enormously, some more than 30% since last year. Stocks like $Alphabet(GOOGL)$ and $Apple(AAPL)$  have been performing better despite the doomsday reports of these stocks tanking because of the higher interest rates.

I remember seeing such a state last year when I first started. If you are starting to invest now, you are probably awed by the stocks going greener and higher. Well, my take is to be prudent. It would be the worst decision now to go all in because my opinion of why the stocks are up is due to the recent rate hike and the expectation that inflation is peaking.

But it is important to remember that the stock market is cyclical (yes I mentioned it just now and I say it again to remember). Stocks will fall and buying when its green is one of the worst decisions ever. Do I buy when its green? Sure I do! But I exercise prudence instead of going all in, with stocks like $NIO Inc.(NIO)$ and Tesla. How about meme stocks? While I will not name any, I would ask that caution be exercised because although it can go up by 20% or more in one day, it can also fall the same way.

Lastly, ignore all reports of stocks "to look out for". If a stock is about to blow, by the time you read the report, all these would have been priced in. The best way, advocated by investors, is to only invest in what you know. To me, that means tracking a stock, knowing what it is about and then buying it. I don't profess to know everything about every stock I buy but I try not to buy it because it has made profits that quarter. I try to buy it because it has long term value. Do I still panic? Yes I do, because I have more to learn but I tend to ignore more noise now. I am still learning (hence a newbie) and I really hope that one day, I will hit profits (am at a state of reduced loss). Do I fomo as much? No I don't. Especially not during earnings season.

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