I think it's a mistake to rely too much on any one economic factor. It's why investors try to spread their portfolio round.
Sentiment: NEGATIVE
Investors should invest on what they know. The biggest mistake is to invest on what they don't know.
Simply put, investors should own less equities, more bonds, more global investments, more cash and more dry ammunition.
Too many investors overvalue companies in the near term while undervaluing them in the long term.
I personally have said many times I'd be a hundred percent in equities. That fits my risk profile and my views of the world, though obviously it's not appropriate for everyone. Most investors need a more diversified portfolio.
The market is incredibly inefficient and capable on rare occasions of being utterly dysfunctional. And people have a really hard time getting their brain around that fact. They want to believe that it's approximately efficient almost all the time, and it simply isn't true.
You've always got to think about having some fixed income in your portfolio as well as equities.
Investors covet past improvements but also always believe pricing unimaginable future creativity and efficiency gains is Pollyannaish. And they're always wrong. Bet on it.
You want less of the annoying nonsense that interferes with your portfolios and more of the significant data that allow you to become a less distracted, more purposeful investor.
You can do too much and oversell your market.
There's a tendency to look at investments in isolation. Investors focus on the risk of individual securities.