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What We Talk About When We Talk About All-Time Market Highs

During certain parts of the financial market cycle, investors begin to behave less as individuals and more as a herd. As emotions take over, reasoning ability is compromised and calculation gives way to expectation. What is happening right now becomes all important. The chance for profits seems both immediate and certain, while the danger of loss appears theoretical and distant.

The emotions around market-highs and market-lows can be a deadly danger to long-term financial interests.

With the market making a lot of new highs in recent weeks, we’re having those conversations with clients. Honestly, we’ve been around long enough to expect them, and we welcome them because we know that the emotions around market-highs and market-lows can be a deadly danger to long-term financial interests.

At those market inflection points, our job as financial advisors is to refuse to validate our clients’ emotions as a basis for action. We do this, we hope, by reminding them of all the ways that we rely on data when making investment decisions. Heavy stuff.

So here’s a fun and very simple Mad-Libs-style exercise about the current exciting market. Fill in the blanks with one of the following four words. (Hint: you’ll only need three.)

Above all, remember that we’re here for you, especially during markets such as these. No article, email, or fun exercise can replace the value of a good old conversation. We look forward to speaking with you soon.


By James S. Hemphill, CFP®, CIMA®, CPWA®/ Managing Director & Chief Investment Strategist

Jim has been a CERTIFIED FINANCIAL PLANNER™ professional since 1982. Jim specializes in complex wealth transfer and retirement transition strategies and coordinates TGS Financial’s investment research initiatives.

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