Don’t be fooled by the title, I’m terribly bad at market timing, but it is tremendously necessary for these moments of euphoria in the markets to remember that everything is cyclical and it is necessary to invest time and energy in understanding the psychology of the market, even if only to protect themselves.

To be able to read the market temperature it is absolutely necessary to put yourself in a long-term perspective. One of the indicators that I find most useful in order to see the market cycle moment is the S&P500 Inflation Adjusted. This index captures the incorporation of inflation data into historical total returns and relative prices produce the following inflation-adjusted graph.