by Adam Hamilton
Gold stocks have radically outperformed every other sector in the stock markets this year, blasting higher as investors flock back to gold. This powerful surge is spawning worries that gold stocks’ new bull run is in danger of exhausting itself. But such fears are totally unfounded. A longer-term perspective reveals that gold stocks’ baby bull market in 2016 remains tiny in the grand scheme. This new bull has barely begun.
Successfully buying low and selling high to multiply wealth in the markets demands traders overcome their own innate greed and fear. These ever-present emotions are constantly warring in traders’ minds, impairing their judgment. One consequence of heeding these dangerous emotions is the tyranny of the present. Traders naturally tend to overweight the present and forget the past, which leads to poor decisions.