Are we really going to do this again?

Just when I thought investors had figured out to behave, I took a look at some of the recent barometers of investor sentiment. And it led me to ask, “Are we really going to do this again?”

“This,” if you’re wondering, requires looking back to 2009. Remember how you felt? Remember being so scared that you couldn’t get out of stocks fast enough? I remember. In fact, I remember that many of us swore that we would never, ever invest in stocks again. But some of the previously burned have apparently been reconverted.

For instance, let’s take a look at the Consensus Index which, as of June 3, reported that 73 percent of investors are feeling “bullish.” Other measures have similarly shown positive feelings about the market (although the AAII Index reading isn’t quite as upbeat).

Stop and think about this change in attitude for a minute. Both the Standard & Poor’s 500 Index and the Dow have already gained more than 120 percent since March 2009, and the vast majority of investors are feeling “bullish” about the stock market.

Doesn’t this sound familiar?

Before you accuse me of being being all gloom and doom about the market, remember that I haven’t said anything about what I think the market will do. In fact, I have no idea what the market will do in the future. I am, however, nearly positive that I know what these excited investors are going to do.

By and large, these investors are investing based on emotion — my neighbor is in the market, I have to be in the market, too. But they’re only setting themselves up to repeat the mistakes of the market meltdown in 2008-2009. That’s because at some point (and this doesn’t require a crystal ball) the market is probably going to drop again. So investors who jumps back into the market today are likely to find themselves repeating that same pattern of buying high (now) and selling low (at some point in the future).

To be clear, I am not saying we should get out of the market. I am not saying we can time the market. I am saying that the idea of people feeling “bullish” worries me, especially when I see headlines like this in “USA Today“: “Bull run gets solid footing.”

So if you’ve decided that now is the time to increase your allocation to stocks, please take the necessary steps to avoid eventually selling out of fear once again:

1. Remember how you felt in March 2009.

Perhaps you have a reminder somewhere of how you felt in March 2009. Maybe it’s little note in a journal, or a blog post, that will help you recall that feeling of dread that caused you to sell. If you can’t find a reminder, talk to your spouse, your accountant, your financial adviser or anyone who could remind you of that moment. Try to bring those feelings back for a minute so you can avoid making the same mistake again.

2. Make sure you have a plan.

To be clear, my advice today isn’t about whether it’s a good or bad idea to invest in stocks. But it is foolish to invest without a plan, regardless of where the markets stand. So make sure you have a plan based on your goals. Pay attention to investment fees. Make sure you’re diversified. Then do your best to ignore your investments. For the average investor, that’s really the only way I know to keep your sanity.

3. Figure out how you’re going to avoid quitting next time.

Yes, there will be a next time. At some point, just like the best roller coasters, the market will take a drop, and they don’t ring a bell before it happens. So make sure you’re prepared for that moment. Have you placed some emotional guardrails in place to avoid going over the edge? You will want to sell, but unless it’s a part of a planned rebalancing, you can’t afford to let emotion drive you from the market again.

Ultimately, these investor sentiment surveys aren’t telling us anything we don’t already know. Average investors tend to get really excited about the market when things are going well. But the idea that we’re about to repeat the same cycle we just survived is ridiculous. You owe it to yourself to figure out a plan that gets you through both the ups and the downs of the market.

We know better. We should act like it.

How to Get A Home Loan

Proof That You're A Tax-Paying, Income-Earning (Legal) Resident

Any bank is going to need to verify your income level and any debt you're carrying. To check this, lenders will ask for your key paperwork, which includes:

-Photo ID and Social Security card

-Proof of home payments (this could be rent) for the past two years

-Two years' worth of W2 forms and two months' worth of pay stubs

-Checking and savings account statements for the past three months

-A record of debts, including credit cards, student loans and car payments

-Records of any other real estate you own and mortgages you're paying

A Solid Credit Score

First, check your credit score for free. A credit score higher than 780 will get you a prime mortgage rate -- which is currently around 3.25 percent. A 720 credit score will still get you a great interest rate, but things get uglier from there. The absolute bottom of the credit threshold is a score of 620. If you're lower than that, most lenders won't consider your application.

How can you get your score back up? Keep renting for another couple of years, and during that time, pay off your credit cards and make timely payments on all of your loans (i.e. student loans or car loans). Make sure you don't miss any utility, cell phone or other payments by setting up online accounts so that your money is automatically deducted each month.

Check your credit score annually -- but keep in mind that any inquiries stay on your report for two years, so don't overdo it.

Perfect Rental

1. Start Early 

When it comes to real estate, the early bird catches the worm...or, in this case, the duplex with the extra closet space and huge bay windows. Starting your search early will up your chances of finding the perfect pad. The best time to start looking is at the end of the previous month, when inventory is the highest. That means if you need to move on August 1, you'll want to start checking out places around June 25.

2. Wait 'Til Winter

If your move-in date is flexible and you can deal with lugging boxes down icy sidewalks or in the middle of a blizzard, think about postponing your move. Between the cold weather and the holidays, fewer people are looking to move during the winter months, making November through March the best time to find great deals.

3. Hire a Broker

If you need to find a place fast and you have the cash to spare, you may want to use a broker. An experienced one can give you insider access to "pocket listings," which are apartments and houses that aren't advertised to the public. Another bonus to working with a broker: They'll do the legwork for you, weeding out listings that don't match your criteria or that don't live up to their descriptions. For real estate novices, a broker can identify whether something is actually a good deal and how much certain features are really worth. Just don't expect a broker to save you money -- their fees (which in some cities can be up to 15 percent of the first year's rent!) can cancel out any savings they're able to negotiate on your behalf.

4. Prioritize

It's easy to fall for fancy extras (sundeck, much?) or a great decor scheme, but don't let those eye-catchers make you blind to the things that will really matter when you live there. We're talking size, location (for example, how far it is from work or public transportation) and, if you have a four-legged family member, the pet policy. After you've got the nonnegotiables covered, use some of those extras you'd love to have (but don't necessarily have to have) to help narrow your search (think: proximity to restaurants, stainless-steel appliances, etc.).

5. Get Your Paperwork Ready

Your dream place is bound to come along, and when it does, you want to be ready. Renting isn't like buying a house, where paperwork and inspections can drag on for weeks. It typically only takes one to two days to process an application, and you don't want to risk losing a place you really love because you couldn't track down your old landlord for a reference or get your credit check done in time.

6. Speaking of Credit...Get It in Check

Having good credit is just as important for renting a place as it is for buying one. The better your credit score, the more negotiating power you have. If your credit score isn't anything to brag about, the landlord is less likely to budge on the rent and may even require you to pay a few months' rent up front or put down a bigger security deposit.

7. Get the Scoop

Talk to the current tenants and/or potential neighbors to get the 411 on how accessible the landlord is when problems arise, what repairs need to be done to the property, if pests are a problem and whether the couple next door likes to throw loud parties.