Six years into an economic cycle is bound to bring on some changes. In every bull market, as it matures, consumer sentiment improves. It’s only natural that we should collectively feel better as our stocks gain wealth. However, “happier” investors tend to fuel exuberant over sustained rallies, and eventually greed begins to take hold. As the herd mentality sets in, prices move ever higher—until ultimately valuations become too stretched and the inevitable downslope of the business cycle begins and equity prices correct.
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