"This is how it is now." A dangerous phrase common among investors that typically shows up after a long stretch of the same thing happening. They mistake the recent reality for perpetual reality.
Right now, the version I hear most is about stocks being superior to everything else. They, whoever "they" is, won't let stocks decline too much or for too long without coming to the rescue.
No more lost decades or deep bear markets. Whatever world existed "back then" is over. The 30's don't count. Same with the 70's. Hell, even the 2000's. This is the new normal. Stocks go up and you don't really need to worry about them.
No need to invest in anything else or invest any other way than buying and holding. Why ever sell? Why contemplate silly notions like risk control? All that gets you is missing the inevitable sharp rally back to new highs.
Markets don't have permanent facts. They have phases — some long enough to feel permanent.
Just hold on a minute. Strong profitable periods for stocks end. They've ended before.
There have been long stretches where a specific country's equity market diverged sharply and stayed that way for years. Think US vs. the rest of the world since the GFC. Feels like a fact. Feels like something you can rely on going forward.
Japan was the biggest stock market in the world in the 1980s. The big kid on the block that could do no wrong. No one could've or would've believed what the next 30 years held. −82% decline and 34 years to recover. That's how drastic things can change.
An entire generation knew nothing but declining interest rates. It's how it is, after all. Rates go down. You can count on it. Can you?
The trap to avoid is calcifying an observation into a belief, a belief into an assumption, and an assumption into a structure that can't tolerate being wrong. That's when you get hosed.
The traders who survive long enough to matter carry loosely held ideas. They form views and act on them, but hold them with an open hand — ready to drop them the moment the evidence says to. They change their mind, their position, and prioritise staying in business. It's the only rational posture in a game that rewrites its own rules without warning.
So go on believing stocks are superior. Just don't confuse the current chapter for the whole book. The market that makes your framework obsolete isn't coming with advance notice. It's going to look, for a while, just like this one.