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I don't know if there is a major drop coming. But I think your right to sell all. Reaching all time highs again and again for a year or more is usually a sign to get out.
I don't know if there is a major drop coming. But I think your right to sell all. Reaching all time highs again and again for a year or more is usually a sign to get out.
And why is that a sign to get out? The S&P 500 has been going up since its inception so it is only logical that it will currently be at, or near, an all time high.
But, that being said, there is still an argument for getting out of equities. The reason is earnings. Historically, the S&P 500 has had a market valuation of about 16-17 times earnings. But we are currently over 20. That means that stocks are largely inflated in value. It is doubtful that this market valuation can be sustained.
But the question is, will the market take a downturn to get the P/E ratio back on track, or will it just languish to let earnings catch up?
And if you exit now, what will you get into? Interest rates make bonds unattractive, and besides interest rates will likely rise as the Fed backs off on QE.
I think if one looks the money is not in markets alone. Certainly a lot of money is so called o sidelines now days. I believe many fear what happened in the 70's recesss where a entire generation never reentered the markets. With boomers retiring risk for them is more and more off as this recession grows longer. Fixed assets is very popular with those with a lot of cash including corporations rather than investing in their business as they exist.
Oh wait, that didn't happen. Why should anyone believe you now? People who make predictions usually show past performance of their predictions being right. Since this is all you stated, with zero backup, all anyone can go on is the past history of your statements. Like every other statement of economic collapse the last one failed completely.
Oh wait, that didn't happen. Why should anyone believe you now? People who make predictions usually show past performance of their predictions being right. Since this is all you stated, with zero backup, all anyone can go on is the past history of your statements. Like every other statement of economic collapse the last one failed completely.
And why is that a sign to get out? The S&P 500 has been going up since its inception so it is only logical that it will currently be at, or near, an all time high.
But, that being said, there is still an argument for getting out of equities. The reason is earnings. Historically, the S&P 500 has had a market valuation of about 16-17 times earnings. But we are currently over 20. That means that stocks are largely inflated in value. It is doubtful that this market valuation can be sustained.
But the question is, will the market take a downturn to get the P/E ratio back on track, or will it just languish to let earnings catch up?
And if you exit now, what will you get into? Interest rates make bonds unattractive, and besides interest rates will likely rise as the Fed backs off on QE.
how much would they have left on the table in the 17 year run up from 1987 to 2003? almost 14% a year average for 17 years . right on the heels of the stock market crash of 1987 when it looked like we were headed back to depression levels after losing 26% in one session.
i got in right after the crash in 1987 and was biting my nails the entire time listening to the doomsdayers spew their rhetoric about the bubble we were in..
I don't know if there is a major drop coming. But I think your right to sell all. Reaching all time highs again and again for a year or more is usually a sign to get out.
Volume is a better signal than an all time high.
IMO: The year of 2014 will go to the bulls.
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