Updated: Jan 9, 2022
-$25737 this month. Under normal circumstances, I should be worried. Strangely, I feel nothing to the correction that happened in the stock market this month.
I feel a sense of relief this finally came.
More precisely, I have expected this to happen.
The stock market has been at a all time high for such a long time now.
Since the beginning of 2021, the S&P500 have made new record over new record.
I have started to worry a big correction might come soon.
I don't have anything to support my idea, it's just a gut feeling or some would say intuitions.
Warren Buffet is piling up in cash, and many other top billionaires are cashing in...
What does that say about the stock market?
Maybe nothing... but at least it should be some warning sign that the stock market has been overheated in the short term.
I wouldn't say that I have predicted this correction, but I did.
Investor who have been in the investing field for a certain time may not trust their intuitions anymore, but I am the exact opposite.
Why you ask? because I believe your intuition is your brain's way of using your collective experience and knowledge to inform you of a possible event.
So I listen to it this time, and bought a bunch of bonds to hedge my stock portfolio.
If you read my other article "How to avoid a market crash", you should know that bonds are a good way to hedge stocks.
Basically, I mean bonds will go up when stocks crash, although not 100% of the time.
Anyway, I bought a bunch of bonds, and it paid off almost 2 days later.