My Best Investment Advice - Watch Your Fellow Investors And Do The Opposite

Chuck Carnevale

In my opinion, the recent selloff in stocks defies commonsense and logic, but in truth and fact it usually does. In other words, it's not uncommon to see investors selling at precisely the time they should be buying and vice versa. Moreover, when investor pessimism is at a high, like it is today, stocks become cheap causing people to panic and sell. Of course, the more people sell the worse it gets and simultaneously the cheaper stocks get.

When investors are in this negative state of mind, it amazes me how even good news can become bad news. For example, one of the common arguments for a pending market collapse is based on the notion that corporate margins are high, and therefore must get worse. Therefore, the pessimist takes really good news and immediately wants to turn it into a negative.

The following is a summary of the S&P 500's Q1 earnings results taken directly from Standard & Poor's website: