Just like oil prices, other energy stocks and the funds that invest in them are on a meteoric rise.
"Unfortunately, many investors fall into the behavioral trap of buying what has performed well in the past," said Joseph Brennan, a principal in Vanguard's Portfolio Review Group. "This sets many investors up for disappointment, as strong performance is usually followed by periods of underperformance."
The caveat further states that investors are "better off avoiding a flavor of the month" and sticking with a balanced and diversified portfolio. Even the
As a tangible example of how quickly the bubble can burst, Brennan pointed to the Internet stocks of the 1990s and the oil sector of the 1980s.