The second you start to feel comfortable as an investor should be precisely the moment you start to question everything.
The problem is, part of being too relaxed is letting your guard down and becoming blind to swelling market pressures.
That’s the crux of the latest bearish argument from John Hussman, the former economics professor who’s now president of the Hussman Investment Trust. Having made a name for himself by repeatedly predicting a stock market decline exceeding 60% and forecasting a full decade of negative equity returns, Hussman says most investors are blissfully and unwillingly ignoring mounting headwinds.
“The key point is that strong investment opportunities are almost always born out of discomfort,” Hussman wrote in a recent blog post. “Likewise, market collapses are almost always born out of confidence and euphoria.