Why Too Much Caution Could Cost You Big Right Now

Chris Johnson

There's a standard answer you hear a lot these days when talking heads and market pundits are asked how they see the current market. It's a phrase I've heard so often it's become cliché.

Cautiously bullish.

It's the ultimate hedge, which I think basically means you like the current uptrend, but that it could turn around any time. Okay, so how it that useful? Are you supposed to cautiously invest?

Frankly, I have no idea.

In truth, the fact that I hear those words so often is one reason I am steadfastly bullish on stocks.

No caution here.

Why? Well, caution means skepticism. It means you're not totally bought in.

Ever hear the phrase, "Markets climb a wall of worry"? Well, caution is worry. Caution means holding cash on the sidelines. And as long as I hear "cautious," this current bull rally has room to run.

When I hear "optimistic" and "all in" and actually see money flows supporting that sentiment, that's when I'll be worried. That's when I'll cash in my calls and start buying puts.

But for now, I'm bullish. Here's why.

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Chris Johnson

About the Author

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Chris Johnson is a quant - he's obsessed with building and perfecting mathematical models that allow him to predict, with startling accuracy, the direction of the markets, entire sectors, and individual securities. For the last year, he's been researching and building a new system that lets him move swiftly in and out of the hottest stocks in the market for life-changing gains - entirely on his own terms. The results of his newly-minted Night Trader system are nothing short of amazing.

Chris also contributes to Money Morning as the Quant Analysis Specialist.

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