Welcome to La-La Land: This Market Feels Familiar (And Dangerous?)

Posted: November 12, 2025

Right now it feels like we’re living in a financial version of “La La Land.” Even the historically-seasonal instability of September and October failed to materialize. Like the part in a movie where everything seems fine, even as the ominous soundtrack is shifting, are we in a dreamlike uptrend while potential cracks are forming beneath our feet?

U.S. equity markets are floating at all-time highs. Yet several cross-currents remain:

New hiring is slowing
Consumer and wholesale prices are rising
The full weight of tariffs has not been realized
The Federal Reserve is signaling more rate cuts, but inflation metrics are sticky
Small businesses are feeling it
Big companies are trimming staff

All the while, investors keep buying like the party can’t end. It is as if the Fed has bottomless pockets and unlimited magic tricks.

And yes, we have seen this movie before.

Rewind: The Dot-Com Illusion

Back in March 2000, the Nasdaq Composite peaked above 5,000 – a euphoric double from the year prior. It appeared unstoppable. But it was a mirage. Over the next 18 months, the index lost more than 70% of its value. It took 15 years, until March 2015, for the Nasdaq to claw back to 5,000.

The lesson? Hope is not a strategy. And gravity eventually wins.

Rewind Again: The Great Recession Slow-Motion Crash

In October 2007, the Dow Jones Industrial Average hit a record 14,165. Less than 18 months later, it had lost more than half its value. The Fed slashed rates, stepped in to prop up markets, yada yada.

By March 2009, the Dow had cratered to less than 6,600. It would take four long years to recover.

The pattern here isn’t subtle:

Optimism builds
Markets stretch far beyond fundamentals
Then something snaps

While the “something that snaps” can be specific and catastrophic – like the mortgage crisis – it need not always be. Take 1987 for example, it was a relatively quiet news day.

Fast Forward: Today’s Familiar Script, New Cast

Now, the Dow is above 45,000, and it’s a different index than in 2000 or 2007 – more tech-heavy, more concentrated.

The investor base has changed too, with mobile apps, meme stocks, and AI-driven chatter making noise louder and making signals harder to find.

But the emotional drivers – greed, anxiety, and fear of missing out – are still running the show.

Short memories. Blind optimism. Déjà vu.

It’s not that markets shouldn’t rise. It’s that they often rise for the wrong reasons, for too long, without accountability. Until they don’t.

The Dangerous Dance of Speculation

If you have ever watched a professional dancer make a leap, there’s that moment where they seem to defy gravity. But we all know how it ends; they land.

The market is no different.

Right now, it’s as if prices are floating on the hope that someone – the Fed, the government, or maybe a miracle – will catch them.

But is risk really gone? Or is it just being ignored?

Trend-following systems don’t care about optimism or headlines. They don’t rely on gut feelings or last-quarter earnings calls. They respond to price action: the one signal that cuts through the narrative.

Systematic Risk Management: The Antidote to La La Land

What keeps investors out of trouble isn’t prediction. It’s preparation.

At Blueprint Investment Partners, we do not try to guess the top or bottom. We follow the trend and stay in motion. When the trend is up, we’re in. When it breaks down, we step aside. No emotion. No ego. Just rules.

This systematic-investing discipline is designed for exactly the kind of environment we are in now. Data signals are murky, confidence is high along with stocks prices, and consequences seem distant…until they’re not.

The market doesn’t need to crash tomorrow for trend following to excel. What matters is being ready when the music stops. Because it always does, at least for a period.

Four Thoughts to Keep Us Grounded

History rhymes, even if it doesn’t repeat exactly – Every bubble looks different, but the psychology is the same: investors convince themselves this time is different. It rarely is.
Markets recover, but not on your preferred timeline – Sure, the Nasdaq came back. So did the Dow. But it took years. That’s a long wait for anyone relying on their portfolio to fund life.
Price is the truth serum – Narratives can deceive. Trends reveal. A systematic approach that responds to price helps investors avoid the trap of hopeful holding.
Risk management is not a buzzword – It is a lifeline. It is what separates the prepared from the regretful. It is what turns chaos into opportunity.

We are not calling for a crash. In fact, we continue to be systematically overweight in the very things that would fall if a bubble were to burst. But we need to be real about where we are. The signs of strain are there. So is the precedent.

Now is not the time to bet on a soft landing without a parachute by abandoning risk management. Our investing systems provide a natural buffer to the most unpredictable events – the parachute that will engage regardless of our feelings or optimism.

Source: Yahoo! Finance, NASDAQ Composite (^IXIC), 3/1/1999 to 3/30/2015 and Barchart.com, Dow Jones Industrial Average ($DOWI), 3/1/2009 to 10/22/2025