Record sharemarket highs, extreme greed, a few wobbles… should we be worried?

Okay, I admit I get nervous when the sharemarket is on a record-breaking run and then it gets a few wobbles.

I’m old enough to have been through enough sharemarket crashes to be spooked in these situations.

I’m sure I’m not alone and a lot of investors would be wondering whether to trim or sell to varying degrees and go into the bunker with cash. But what if the bull market keeps going and they miss out on more upside?

I’m a subscriber to the Marcus Today newsletter/website/podcast and am good mates with its editor Henry Jennings. He’s a regular on my sharemarket program The Call on the ausbiz streaming network (ausbiz.com.au and streaming on SevenPlus, Samsung smart TVs and Fetch).

The Marcus Today team had some great comments and advice in their newsletter last Saturday. They pointed out the US’s S&P 500 is up 43 per cent, but that’s after a 25 per cent drop (2022 was a terrible year for US equities). Similarly, the NASDAQ may be up 61 per cent, but that follows a 38 per cent fall in 2022, and it’s only just got back to where it was.

Marcus Today reports: “So we don’t see anything precipitous happening, but we do have a few observations. The market is getting more vulnerable to a correction the higher it goes, Big Tech is likely to lead it, and the more the strategists talk about it the more likely it is that some big institution in its asset allocation meeting in its ivory tower [concludes] that they should start selling before everyone else does… And off it goes.”

So, according to Marcus Today, here’s what to do:

Nothing yet. Enjoy the ride.
Don’t sell anything until it starts – the best bits are the frothy bits. Don’t miss out by being pious about “value”; this is about exploiting the herd not assessing value.
Don’t buy anything when the market is high.
Don’t predict the top ahead of time.
When the selling does start, do something, make a decision. Even if you’re wrong to sell your only risk is not making money… I think you can handle that.

Such great advice.

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