Stock investors beware: There can be too much of a good thing

Stock investors beware: There can be too much of a good thing

Traders on the New York Stock Exchange.

Source: NYSE

Whether there can be too much of a good thing has divided such thinkers as Aesop, Mark Twain, Mae West and Jerry Garcia over the centuries.

On Wall Street, the evidence shows that positives can pile up too high to keep driving stocks higher, but discerning when a market crosses the line from all good to too good is a tricky blend of art, analysis and luck.

Put somewhat differently, investors should be careful what they wish for because it can sometimes disappoint — but not always right away.  

The indexes’ tireless climb in recent weeks and months has registered a handful of blindingly positive behaviors as the bulls have run up the score and punished the cautious. Not a bad time to scrutinize a couple of widely celebrated market trends that many investors have been rooting for, then.