This is what I wrote in our Investor's Edge Chat Room a little while ago:

The only areas up today in our Investor's Edge portfolio are energy shares, up nicely, consumer staples, up nicely, and Palantir (NYSE: PLTR), which marches to the beat of its own drum no matter what the market does.

"The easy answer for "why is it down?" is that investors are not stupid. We realize that you cannot create $6 trillion out of thin air, spend it without significant forethought, then tax the Americans who pay taxes to get it back! This kind of spending spells i-n-f-l-a-t-i-o-n.

"Also, part of the problem from a purely visual-leading-to-visceral perspective is that is that the numbers are bigger these days. On a percentage basis, today's Dow is currently down 1.7%, exactly the same as the Global Dow. But that means the Global Dow is only down 72 points while the Dow is down 600!

"600 sounds "huge." 72 sounds ho-hum by comparison. Don't obsess over the big number. Is a 1.7% decline troubling? Maybe, especially if it's a harbinger of worse times to come. But the fact that smart money is buying materials and commodities on this down day - witness the moves up in energy and materials - might simply indicate sector rotation, which I have been predicting and acting upon for the past three months."

The Fed chooses to feed investors the simplistic pabulum that there's no inflation using the logic that if there was inflation we, the all-knowing Oz, er, Fed, would know about it and take immediate and appropriate action.

Huh? No inflation? Got a kid in college these days? Been to the hospital lately? Bought gas? Been to the grocery store? What kind of soma are they imbibing in the rarefied air they hold their meetings in?

I must presume that Fed bankers, no matter how humble their origins, when they reach the plateau of high-level economic thinking, cannot see the forest for their statistical trees.

Forget their soothing sayings and soothsayings. Inflation is the inevitable result of spending like a band of drunken sailors on shore leave. The gulf between their words and our experience is why we can expect more choppy markets. You know, like they have always been.

What to do now?

Chicken Little panic is not the answer. I suggest instead:

(1) Stop obsessing about the "big numbers." Look at the percentage rise or decline in your portfolio instead. And look at the indexes, which you most likely do not own in their entirety anyway, with the same coolheaded gaze. So it's down 1.7%, or up 1.7%, or unchanged. It's no reason to either throw in the towel on a single down day or rush to buy more FOMO junk on a day you fear you might be missing something.

(2) Recognize sector rotation as probably the most important single key to stock market success. We have enjoyed a delightful - and unusual - period of such low inflation that any companies that may have no or low earnings today, but the promise of massive earnings in a year (a little something we call "growth stocks,") have been big winners.

Will growth as an investing medium continue to be the best choice in a more normal inflationary environment? I don't know, you don't know, and the Man in the Moon does not know. However, as a really long-time student of market history, I made the decision this year to begin to lighten up on tech and many other growth areas and slowly move more funds into energy - both traditional and up-and-comin' - materials, industrials, and real estate.

I still maintain a diversified portfolio, with "some" representation in nearly every sector and, lately, an increasing position in the Defensive and Income portion of my personal as well as our Investor's Edge portfolios. There always will be the occasional special outlier within an out-of-favor sector or industry - and, of course, the occasional clinker in an otherwise-great sector or industry!

Sector rotation will keep you from throwing everything you own into one idea or one stock. Intelligent sector rotation will likely make you more money, albeit at a slower rate, than the occasional rocket of a stock.

As the Chinese government has discovered yet again, rockets and their cargo sometimes have a way of messy and dangerous re-entry on the way down, leaving nothing but shards of metal and busted dreams.