One of the things about being a new couple is that we go out for lunches and dinners with other couples quite a bit now. This is a completely new thing, and something which I didn’t think I’d like that much, but it’s not that bad; actually I enjoy myself quite a bit.
On one such lunch, the conversation turned to the stock market, and our friend told me about his portfolio, how he bought close to the peak of the market, and how he expected to recover his money within six months or so. I asked him if he used a money management software that made this projection for him, and he said – this is just his hunch.
I think this is the first time in a long time I am listening to someone tell me that the market is going to go up in the next few months. I was wondering at that time if the market was so high that it inspired such a great deal of confidence in him.
I had forgotten all about it, but today I read a headline in Business Standard which said the market is poised to cross 5,400. It’s amazing how little things change, and how the cycle follows the same pattern every time. I was reminded of Peter Lynch and his cocktail theory, and if you haven’t read the post – I think you should go through it because you will be able to see the stages he talks about very easily around you, and it will help you in your investment process.
I am not here to say if the market will go up or down in the next few months – I have no clue – I just want to point out that there are cycles in the market, and that paying attention to them can save you a lot of heart-ache and money. Being optimistic is not bad, but be careful with your money – it’s your money after all.