Conviction is contagious, which is exactly what makes it dangerous.

I read this quote a few weeks ago from Scott Melker, who writes a newsletter, and thought how very true this is.

My partner and I have been managing client's assets for over 38 years and we can attest to this quote as factual. When everyone is sure of something on Wall St, it might work for a while, but eventually it stops working or at the very least, will test your "conviction." The problem is, since it wasn't your idea in the first place, you begin to question yourself and your alleged conviction in whatever it is.

Look no further than what happened Friday, January 30^th to the precious metals markets. Over $7 trillion in market cap losses in a single day to the four largest metals; Gold, Silver, Platinum and Palladium. If you have any exposure to these in your portfolio, we hope you read our previous Benzinga blogs warning about Gold and these no longer being your traditional hedges against inflation.  Silver, which was at $30 in early 2025, hit a high of $121 which, coincidentally, was on January 29th the day before it plummeted over 30%. Clearly, this is not a normal occurrence, but we would state, nor was the run to $121.

Now the supposed culprit to this massive sell-off was President Trump's nomination of Kevin Warsh as the potential next Fed Chair. Not a chance. For starters, he hasn't even been confirmed, and if you listen to some of the talking heads in our Nation's capital, there is not a chance he will be. So, if that is the case, why haven't these metals recovered? They bounced a few days after January 30th but now the question becomes, what should investors do with their $120 Silver or even their $70 Silver? How much conviction do they have now?

As my firm LCM Capital Management has stated for decades, we are not in the prediction business, nor should investors be, nor Wall Street's market strategists or analysts because they are usually wrong.

Stay diversified within YOUR risk tolerance, not someone else's. You will be much better off in the long-term and investing is a long-term game.

There is a better way

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.