The new year has started with its first green week and the general sense you get from the market is the people on the street are more optimistic, building up a strong end to 2017.
Sir John Templeton once gave a great quote that says “Bull market is born on pessimism, grow on skepticism, mature on optimism, and die in euphoria”.
If you’d ask me which stage do I think the market is right now, I would think that we are at the optimism stage, which is usually accompanied by higher market valuation, higher interest rate, tightening of the monetary policy, increased spending, etc etc. The general consensus is that we are not at the dire stage of pessimism.
The 2D diagram below would probably give an easier visual of the general sentiments of where the maximum risk is during certain stages of the financial market.
If you are someone …