When news of the Goldman Sachs ($GS) fraud charges dropped the Dow 125 points out of nowhere Friday morning, you probably reacted in one of two ways…
1. “OK, the helium balloon act is over, time to get out of all this junk I’ve been riding, maybe even look for some shorts.”
2. “Finally! The dip I’ve been waiting for! Steels and retailers and techs are all pulling back for the first time in months! I’m all over this stuff.”
Now keep it real…I may not have gotten your exact words or subconscious thoughts right, but here’s your chance to recollect which response was closest for you. Why is this important? Because your reaction speaks volumes about whether or not you believe in the recovery.
Were you riding the rally wave just because it was working and everyone else was? Or did you really believe in the recovery and that you were buying cheap stocks?
Take a moment to think about what you did when the news hit and the market dropped – were you gleefully checking your liquidity for a buying opportunity or packing up the circus tents because the fun has been had and now it’s time for reality to set in.
It really is that cut-and-dry. No one can answer this question for you.