Did you know that a stock market rise typically generates negative comments? Realizing that the market “climbs a wall of worry” and instead focusing on high-quality stocks is the best way to maximize your portfolio returns

No one can predict the future, in the stock market or anywhere else. But with the help of the right mindset, you can develop a sense of things that a successful investor should pay attention to—or can safely disregard.

Here’s one of the most valuable things you should recognize as an investor: “A rising market climbs a wall of worry.” In other words, you need to recognize that a stock market’s rise, automatically generates negative comments. The higher and/or longer the market rises, the more negative comments it generates. These are the bricks in that wall of worry.

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Worry around a stock market rise grows from human nature

The inevitable building of this wall grows out of human nature. Many people are instinctively cautious or conservative. When they see a stock or the stock market go on a rise, they look for reasons why the rise may falter or reverse. That’s especially true of stock-market commentators. When a stock or the market rises beyond their expectations, they dig deep for hidden flaws.

This spurs them to come up with comments that at times seem deliberately slanted to promote a negative view. You might call them “misleading indicators.” Here’s an example:

“The market had the biggest drop in a day (or week, or month),” or “the longest string of falling days, since…[a date chosen to maximize shock value].” When these kinds of comparisons began appearing in the news this year, after a long dry spell, some investors took it as ominous news. They assumed it meant the market was at risk of greater declines. It means nothing of the kind.

Sometimes, of course, the market puts on big one-day declines near the start of a long-term price decline. It has also done so near the end of such declines and at various points in the middle. The same goes for big one-week and one-month declines and for long strings of down days.

That’s because there’s a large random element in short-term stock price changes. They have no predictive value.

A stock market rise and fall within a year is not uncommon

Every year, the market will hit a series of “new highs for the year,” or a series of “new lows for the year.” In many years, it will hit some of each.

When you adopt “A rising market climbs a wall of worry” as a mindset, it will help you maintain your perspective. You’ll start to recognize that milestones like these are trivia, passed off as meaningful statistics. The investment news is full of them. You may find they make interesting reading or listening, but they also burn up valuable time. You’ll earn a far greater return on that time if you devote it to learning and comparing facts about the companies you invest in.

Stock market rise: Why stocks imitate the traffic on freeways, not elevators

Successful Investors rarely if ever sell near the top, nor buy back near the bottom. If you could do that with any consistency, you’d “make all the money in the world”, as the saying goes.

If you constantly worry about the “big picture”, you may at times manage to sell at just the right moment to sidestep a serious downturn. But you may only do that after sitting through a series of downturns. The downturn you avoid may turn out to be the last in a series—the “final leg downward”, as short-term traders like to refer to it.

The next big move in the market may be upward. You need to get back in the market or you’ll miss out. Wait too long and you could wind up paying more than prices you got when you sold.

Note, however, that the stocks that make up the market don’t go up and down like a bunch of people in an elevator. They are more like commuters in a city. Most go the same way every morning and evening, with the traffic. But lots of others go against the traffic, if only sporadically.

Some commuters head off for work at the same time every day. Others are often late. But the real go-getters are the first to arrive at the office, and last to leave. Here the analogy is particularly apt. When the market pulls out of a slump, the best stocks for the next rising phase may have already begun to rise. In fact, some will have begun to rise before the slump began.

Dealing with a stock market rise: Investment quality is the key to finding stocks with gains ahead

In the end, our Successful Investor stock trading advice is that if a stock is truly worth investing in, you should be willing to buy it at current prices, even if that means you run the risk of having to sit through a 5% to 10% setback. Before it puts on its next 5% to 10% setback, after all, it may first go up 50% to 100%.

Political turmoil often leads to a stock market rise. What other events have you seen that lead to rises?

How much “commentary” do you take into account when deciding to buy or sell stocks?