When you hear the following signs in stock market, you know the market is overheating and the major correction or market crash is not far away.
2. Majority of investors even common folks are very optimistic about stock market.
3. Media covers with many positive news about stock market. Stock market becomes the headline news. You see most stock market news are interpreted as positive, even occasionally negative news do not seem to affect the stock prices at all because the market is really 'hot'.
4. A lot of people talk about making 'fast and hugh' profit within a few days or even a single day. They are generally very optimistic about stock market than anything else. Stock market seem to be their first priority now.
5. Almost all stocks are over-valued and set another new record high, majority of investors are very positive even for high P/E penny stocks and expect a further rise in the stock prices. They are afraid of missing the 'bull ride'.
6. Many companies went IPO, almost all newly-listed IPO over-subscribed unprecedented.
7. Almost all newly listed IPOs stock surge in first day of trading. Some IPOs stocks even surge more than 50% within a day. Unbelievable but true.
8. Extreme high volumes traded almost on all stocks, historical low-volume stocks also see significant rise in volume traded.
9. Even ordinary folks who have very little knowledge about stock market suddenly just queue and buy stocks. They just buy stocks blindly based on rumors. They 'tasted' quick gain and most of the times they just have strong hope their stocks are likely to hit another record high, they will usually hold it instead of taking profit because greed already set in.
10. Suddenly a lot of new accounts are open with stockbroking companies so as to trade in the stock market. You hear, read and watch news about family took their life savings and put almost all in stocks investment and suddenly they give 'advices' to ordinary folks about getting rich with their money.
11. Most market experts will think market crash will falls to others but not them. They will say the bull market now is different from last time. The markets never change but they do. Despite their knowledge, they are still 'blinded' by the fact of risk of investment.
12. Maniacs and excessive irrational in stock market. People spends more times talking about making quick money from stock market than making decent living from their jobs.
13. When a lot of stock investors suddenly become 'rich' overnight. Making money appears to be so easy in stock market.
14. ....
When the above warning signs exist, you know the end of a bull market is very near and the start of a bear market will begin soon. Hopefully by learning these common warning signs, you can liquidate your stocks investment fast and take your profits early before the market heading for major correction or crash. Although you may not get out the best/peak time but you will be rest assured the money already cashed out to your banks. You don't want to get caught of still holding the over-valued stocks. When market crash, blue-chips stocks are not spared either.
There are always some warning/tell-tale signs before bull stock market heading to major correction or crashes. If you are astute enough to recognize these signs, likely you are already cashed out your profits and out for good.
When dealing with human psychology, greed pushes up the stock prices but fears pushed it down. Be cautious with your hard-earned money or life saving. Bull markets are not long-lasting. The reverse is also true.All the best!
Attached video shows one of the investors invest all of her life saving in stock market. She voiced how she felt the pain of the markets recent tumble. Look like another painful lesson of not knowing the risks of investment when market is overheating. Unfortunately, this kind of thing happens every times when market is overly-optimistic. Someones will always get caught. Be cautious!
No comments:
Post a Comment