Why Bad Is Good & Good Is Bad

Let’s take a time out for the best dance ever by a couple:

http://videos2view.net/shag-dance.htm

Now, back to real life (why bad is good….):

Writing for BlackRock earlier this week, Russ Koesterich said:

“Investors have recently equated signs of an improving economy with an imminent end to the accommodative monetary policy that has supported this year's rally. Stocks generally headed south in reaction to good economic news and north in response to weak, or mediocre, economic news.

Russ says he anticipates lots of irrationality in the securities markets “until we see consistently robust economic growth numbers” come autumn.

My explanation is different, and it has nothing to do with irrational behavior:

When a good stock rises in price to a level that gives investors a headache, they take their profits and look to reinvest in a good stock that’s oversold.

That pattern helps to explain this oft-heard advice: “Buy low, sell high.” Perfectly rational.