Many investors today are not very familiar with market history and tend to live only in the day-to-day mainstream narrative while watching little red and green graphs move up and down. This is not so much an issue in a relatively stable economic environment. The problem is, today we live in the most unstable economic conditions possible.

These investors and analysts are simply not aware that some of the most exciting stock rallies occur during the most volatile crises, and so they interpret every rally of a few days to a few weeks as a signal for recovery.  However, in this kind of fiscal environment, all the gains made in a few weeks can be lost in moments.

After the Great Depression began to take hold in U.S. markets, massive rallies unfolded over the span of weeks and sometimes months, only to end in a collapse to even lower depths. For example, in 1930 the Dow Jones enjoyed historic rallies twice, gaining 48% only to lose it all, then gaining more than 16% and crashing down to a 50% loss for the year.