The Goldilocks Scenario

For those not familiar with the story, ‘Goldilocks and the Three Bears’ is a 19th century English fairytale of which three versions exist, one of which is that of a young woman called Goldilocks who enters the forest home of three bears. The Goldilocks principle is named by analogy to the story in which Goldilocks tastes three different bowls of porridge and finds she prefers porridge that is neither too hot nor too cold, but has just the right temperature. To compare it with the world of investing, the present market appears to be in a similar space, one that is neither too overbought nor too cheap. Secondly, consistent prediction of market movements and profitable outcomes is a rarity. As a result, it is essential for investors to be prepared. The question then arises, how does one stay prepared?