"Market sentiment is wildly bullish.The latest Shiller P/E ratio jumped to 21.87x in November from 21.38x — we have not seen it this high since June 2008 (and recall that the market went down 45% from there to the lows of 2009). According to this metric, the U.S. stock market is overvalued by 33%. Yikes! And the typical Wall Street strategist thinks this market is cheap!"
Only by standing against the prevailing winds-selectively, but resolutely–can an investor prosper over time. Such a strategy may underperform during markets that are rising, based upon the momentum of the herd vs. fundamental valuations.
A contrarian style of investing is the ONLY method that has proven, over time, to reduce risk and take advantage of opportunities.