The markets have seen their fair share of “irrational exuberance” as long as the notion of investing has been around, leading to bubbles. (Keeping your exuberance tempered).
The best defense to fight the possibility of losses is to enter into the market with a strategy. By following a strategy, you can avoid market bubbles, panic selling or herd mentality buying. We watch the 200-day moving average. When a position moves above, we buy; when it drops below, we sell. (Why does trend following make sense?)
For more guidance on building a strategy and implementing it, check out the The ETF Trend Following Playbook for more advice.
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