What’s one of the biggest risks investors face — but rarely ever talk about?
Opportunity cost.
It’s one of the most overlooked risks in all of investing, quietly draining returns and fueling regret for investors everywhere.
If you’re new around here, opportunity cost simply means the money you didn’t make because you were in the wrong thing — or not in the right thing.
It’s the gap between what was and what could have been.
Most investors don’t like to think about it, because it forces them to face uncomfortable truths:
How much did you leave on the table by sitting in cash?
By chasing the wrong stocks?
By ignoring stronger trends somewhere else?
That’s opportunity cost, the silent killer of performance.
Imagine Being in Cash?
Back in 2022, a lot of investors bailed out of the market for “risk-free” returns in cash or government bonds. They were bragging about locking in 4% with no risk — like they’d cracked some secret code.
Here’s the truth: whenever you hear the words “risk-free” in markets, that’s your signal to run the other way.
Because what those investors completely ignored was the real risk: opportunity cost.
While they were clipping their “safe” 4%, the Nasdaq doubled — right in their faces. That’s not “safety.”
That’s missing the trade of a lifetime.
The same media that told everyone a recession was a “near certainty” in late 2022 was still pushing the fear narrative while the market was already turning higher.
That’s when I was live on Fox Business Network with Maria Bartiromo saying the opposite — that it was a bull market and investors should be buying stocks.
I’ll never forget the look on her face.
Imagine what it must be like to have not been fully invested in stocks since the end of 2022? Ouch…
Opportunity Cost Today?
So where’s the real risk today?
What’s the thing investors are missing that’s going to hurt them later?
I think it’s U.S. stocks.
In fact, I think it’s stocks — as an asset class.
Everyone thinks investors are “too bullish,” but the data says otherwise. Fewer than one in five individual investors believe people are too bearish right now.
I’m one of the few who do. Clearly.
Yesterday I was wandering through a bookstore with my kids — they love bookstores.
Right there at the entrance, staring back at me, was The Economist screaming about “The coming debt emergency”:
Of course I bought a copy.
I collect these covers… I have for years.
Altogether they’re a master class in human behavior, and more often than not they mark major inflection points in markets.
I think this will be another one of those times.
Years from now, we’ll look back and laugh at the “debt emergency” that never happened — just like we still laugh today at the “100%” recession call from 2022.
Remember that? The Dow was 17,000 points lower.
Since then, the Nasdaq-100, as tracked by the Invesco QQQ Trust (QQQ), is up 140%. The iShares MSCI All-Country World Index ETF (ACWI) has doubled.
Recession, they said…
They lied.
Everybody was wrong.
And I expect them to be wrong again… Very wrong.
It’s going to cost them — not because they’ll lose everything, but because they’ll miss everything.
That’s opportunity cost.
And while most investors run from it, we embrace it.
I encourage you to do the same.
This Week in Everybody’s Wrong
On Monday, we talked about the value of community and the importance of regular human interaction.
Doing it together is not only better for returns, it’s better for the soul too.
And TrendLabs is all about community.
On Tuesday, we looked back six months at what journalists were telling us was happening in the market and the economy in April.
It’s a bear market, they said, and we saw some of the most bearish sentiment on record.
I’m often asked about the best advice I’ve gotten.
On Wednesday, I shared the worst advice about the stock market I’ve ever received.
Would you believe the answer involves “funnymentals”…
On Thursday, we celebrated what was literally the best day to buy stocks.
Also, we’re heading into the best three-month stretch of the year, November through January.
Are you buying stocks? We are…
On Friday, we discussed focus.
We start with the entire universe of stocks and narrow it down with a strict set of criteria to the ones that truly stand out.
We’re only trying to catch the best setups in the strongest trends.
On Saturday, Senior Analyst Jason Perz walked us through what’s happening in the precious metals market right now.
Gold is rewriting the rules, and silver is running out.
Here’s Jason on why everybody’s wrong about the yellow metal and its crazy cousin.
Have a great Sunday.
We’ll see you Monday morning…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs