Editor's note: The world is starting to move on from COVID-19...

Lately, people are dining out, shopping, and traveling in numbers we haven't seen for more than a year. In short, the U.S. is exchanging fear for extreme optimism. And investors are taking note... They're piling into stocks, pushing them to irrational heights.

But if you're worried that the market mania can't go on forever, you're not alone...

According to True Wealth editor Steve Sjuggerud, this extreme investor euphoria is a major warning sign that the "Melt Down" is approaching. But before that happens, he also believes that today's market environment could lead to some of the biggest gains we've seen yet.

Today's Masters Series comes from a combination of the March issue of Steve's True Wealth advisory and the February issue of his True Wealth Systems service. In it, Steve explains what investor expectations mean for stocks going forward... examines the idea that we're in a market "bubble"... and reveals why it's not time to run for cover in your portfolio...

Investor Optimism Is Reaching Never-Before-Seen Heights

By Steve Sjuggerud, editor, True Wealth

Deadly virus? What deadly virus?

It seems that extreme optimism is taking hold out there...

I flew home to Florida in March, and the plane was packed. Every single seat was taken, including the middle seats. The waiting area in the airport was like old times – shoulder to shoulder.

I went out to dinner the night before in Baltimore with my business partner Dr. David Eifrig, my right-hand man of 10 years Brett Eversole, and a few others. We ate outside... But like the plane and the airport, the restaurant was packed – every seat was taken.

We walked from the Fells Point area, where the bars were packed... to Harbor East, where the restaurants were packed... and we thought: Baltimore is back!

It's not just Baltimore, either. Good luck getting a reservation at any restaurant these days, much less a seat without one. And you'd better make your travel reservations soon... The hotels at home in Florida are booking up FAST.

This is a major change. And as I'll explain today, it shows that we're nearing a major turning point for the markets.

You see, a few months ago, we had the opposite situation...

The airport was empty. Restaurants were struggling. And hotels were ghost towns.

I have never seen such a dramatic change from mass pessimism to mass optimism as we have seen this year.

Folks have good reason to be optimistic...

My doctor – who is not a man of hype – told me a couple months ago, "Every American adult who wants a vaccine should be able to get one by the end of April." His prediction turned out to be mostly accurate, though maybe a few weeks optimistic.

So what does this have to do with investing?

A lot. Everything. But maybe not in the way you think...

You see, markets don't actually move higher simply because times are good. And they don't move lower when times are bad.

Let's say that Apple (AAPL) reported that earnings are up 20%. Sure, that's good. But that information isn't what will move the market. What will move the market is where that number stands relative to expectations...

If investors were expecting earnings growth of 15%, then Apple's stock will soar. If investors were expecting earnings growth of 25%, then Apple's stock will crash.

So then... if markets move on expectations, when is the optimal time to buy? When is the optimal time to invest?

The ideal time to buy is when investor expectations are low... when it's easy for a company or a market to exceed the bar.

Today, people are incredibly optimistic, which is nice – as human beings, we want things to get better. But people might even be irrationally optimistic at this moment.

A few months ago, they were pessimistic. They didn't want to take the risk. Today, they are willing to take a risk. They're betting that they'll be OK.

I'm simplifying it, of course. But I hope what I'm saying makes sense...

To give ourselves a shot at the biggest gains, we want to buy when everyone is overly pessimistic about an asset or market. Then, we want to ride that uptrend as far as possible.

When investors get overly optimistic – like they are today – it's a major warning sign. But importantly, it's not the sell signal...

The Melt Up is still in place for now. And we want to ride it as high as possible.

The sell signal arrives when the downtrend arrives... That's when we want to get out. And despite a huge shift in sentiment, we're not there yet.

But I know what you're thinking...

This can't go on for much longer, right? Aren't all these new traders a sign that the Melt Up is almost over?

It's true. Lately, we've seen hordes of new investors throwing caution to the wind. And they're signaling that we're closer to the end than the beginning.

These traders are exactly what we'd expect to see in the late innings of a Melt Up. I want to be clear, though... A frothy market like today's is what the Melt Up is all about. And while I expect the bull market could end soon, anyone betting on an immediate peak is probably going to miss out.

Let me explain...

I'm not trying to brush your concerns under the rug. If you're worrying that a bubble in U.S. stocks is about to pop, you're not alone...

The idea that we're in a stock market bubble is growing in popularity. One way to see this is by looking at how much people are talking about it... or even better, at how many people are searching the term online.

Google's search trends can show us interest in a search term today compared with the past. In February, we saw more searches for "market bubble" than any other time over the past five years. And it wasn't even close. Check it out...

The scale goes from 0 to 100, with 0 indicating no interest in the topic and 100 indicating maximum interest. So the most searches ever would become the 100 mark, and everything else is based off of that.

The reading in February was 100. That's the highest level on record... dwarfing any number we've seen in more than a decade. Said another way, more folks were thinking about a market bubble than any other time recently. It has really worked into the psyche of the typical American investor.

The number has come down since then... But we're still at elevated levels compared to history.

Does that mean we need to run for cover in our portfolios?

Absolutely not!

Again, we know we're in the thick of a Melt Up. Bubble behavior proves that the thesis is playing out as expected.

Even more important, the biggest gains happen in the final innings of a Melt Up. Tech stocks rallied more than 100% in the final 12 months of the last Melt Up, during the dot-com era.

One of the worst things we can do is get out before the biggest gains take place. So while signs of market euphoria may be showing up, that's normal in today's environment.

In fact, we want to see bubble behavior... because it will lead to our biggest gains.

It's crucial to be aware of the coming Melt Down. But you can't flee just yet... You want to ride the wave as long as you can.

Good investing,

Steve Sjuggerud

Editor's note: Steve believes you still have time to potentially make outsized gains in the Melt Up's final innings... But if his latest predictions prove true, a destructive Melt Down in stocks could happen before the end of this year.

He says a huge shift is happening in the financial markets right now... And the decisions you make now could determine what happens with your wealth for the next decade.

Steve revealed the details of what he sees coming in the market – as well as what you need to do to prepare – during a special presentation earlier this week. But if you missed it, it's not too late...

For a limited time, we're offering a free replay of Steve's big event. Plus, he gave away the names and ticker symbols of two investments that he believes could climb as much as 1,000% in the coming months. Get started right here.