**When retail confidence is at its peak… wise investors exit**
Timing is everything in the world of investing. The most obvious sign of a market peak is when ordinary investors start pouring money into stocks with unwavering hope. When retail investors invest with full confidence, experienced and savvy investors — known as 'smart money' — quietly begin to exit the market.
Retail confidence peaks when news is enthusiastic, financial social media accounts talk about 'surefire' stocks, and the market narrative revolves around 'unstoppable growth'. This hope is fueled by FOMO (fear of missing out) and a belief that the rally will never end. But that is often when savvy investors are noticing signs of danger — such as excessive prices, overbought conditions, and a weak market foundation.
Smart money often operates in the opposite direction. These investors take positions during fear and sell during enthusiasm. History shows: during the dot-com bubble and the meme stock hype of 2021, institutional investors were already starting to exit the market when retail investors were just entering.
This is not cunning but strategy. Smart money knows that the market operates in cycles. They make decisions based on data, emotional analysis, and experience. When the public becomes fully confident, savvy investors have already cashed in their profits and exited.
The lesson for retail investors is clear: beware of excessive enthusiasm. When everyone thinks the market won't go down — that's often when it does. Certainly! This is the English translation of the mentioned article:
When retail confidence is at its peak… wise investors exit.
Timing is everything in the world of investing. The most obvious sign of a market peak is when ordinary investors start pouring money into stocks with unwavering hope. When retail investors invest with full confidence, experienced and savvy investors — known as 'smart money' — quietly begin to exit the market.
Retail confidence peaks when news is enthusiastic, financial social media accounts talk about 'surefire' stocks, and the market narrative revolves around 'unstoppable growth'. This hope is fueled by FOMO (fear of missing out) and a belief that the rally will never end. But that is often when savvy investors are noticing signs of danger — such as excessive prices, overbought conditions, and a weak market foundation.
Smart money often operates in the opposite direction. These investors take positions during fear and sell during enthusiasm. History shows: during the dot-com bubble and the meme stock hype of 2021, institutional investors were already starting to exit the market when retail investors were just entering.
This is not cunning but strategy. Smart money knows that the market operates in cycles. They make decisions based on data, emotional analysis, and experience. When the public becomes fully confident, savvy investors have already cashed in their profits and exited.
The lesson for retail investors is clear: beware of excessive enthusiasm. When everyone thinks the market won't go down — that's often when it does.