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No one can "time the market". The market has a way of making very smart people look like fools and moves the opposite way of what is expected quite often.
1. Fact: We are in a stock market and real estate bubble
2. Fact: Interest rates are rising
3. Fact: QE is ending
4. Fact: Inflation is rising
5. Fact: The stock market can continue to rise, despite high valuations and strong head winds, as it is a market of supply and demand like anything else. At these valuations THERE WILL BE A CRASH. When will it happen? WHO KNOWS!
Don't let your politics get in the way of your investing. The world is coming out of a pandemic. There is no reason - none - to expect anything but solid world wide growth over the next year and probably longer. Almost certainly there is no scenario for a "crash". That is just projecting politics - a sure way to lose.
Don't let your politics get in the way of your investing. The world is coming out of a pandemic. There is no reason - none - to expect anything but solid world wide growth over the next year and probably longer. Almost certainly there is no scenario for a "crash". That is just projecting politics - a sure way to lose.
Well, I'm waiting for the Superbowl before I make any major investment decisions.
Don't let your politics get in the way of your investing. The world is coming out of a pandemic. There is no reason - none - to expect anything but solid world wide growth over the next year and probably longer. Almost certainly there is no scenario for a "crash". That is just projecting politics - a sure way to lose.
How funny you Leftists now understand that this is a “world wide” pandemic. Just last year, you Leftists were blaming Trump for not keeping the virus out of this country. As if somehow, the virus while spreading all over the globe, Trump could have magically stopped it from entering this country.
How funny you Leftists now understand that this is a “world wide” pandemic. Just last year, you Leftists were blaming Trump for not keeping the virus out of this country. As if somehow, the virus while spreading all over the globe, Trump could have magically stopped it from entering this country.
Way to go off topic. Back to the stock market crash that isn't happening.
Don't let your politics get in the way of your investing. The world is coming out of a pandemic. There is no reason - none - to expect anything but solid world wide growth over the next year and probably longer. Almost certainly there is no scenario for a "crash". That is just projecting politics - a sure way to lose.
You are completely wrong- the rest of the world is "coming out of" a world wide pandemic as well. In contrast, their stock markets have not achieved the insane multiples of the US market.
1. The US stock market is grossly over-valued by any measure
2. European and developing market stocks have far lower P/E ratios
3. We have rising interest rates
4. We have rising inflation
5. We have cessation of QE
All the forces that drove the US stock market to grossly over-valued prices are ending. We had low inflation, massive QE, and low interest rates. All of those factors are reversing.
I do not need to gain another dime, so I value asset protection above all else. In the absence of "distorted" P/E ratios (like after the 2008 crash), I don't add to stocks when the Schiller P/E ratio is 1.5 X historical values.
If you think there is not going to be another crash, you are dead wrong. Crashes happen as a matter of course and occur in situations of excessive valuation when the buyers dry up. I have avoided the '87, 2000, and 2008 crashes and have arrived at a point where I take very little, if any risk any longer.
I would talk to someone before doing that. My advice stay cool and when it drops further switch to more aggressive and hopefully make up for the losses.
I took that advice a couple years ago, and lost almost $100,000, so...
I took that advice a couple years ago, and lost almost $100,000, so...
"Buy the dip" is a mantra created by investment firms.
People NEVER gladly over pay for consumer goods, but are often delighted at overpaying for stocks. And, in contrast, they hate stocks when they are actually cheap.
I have missed part of upside gains by not buying above certain P/E levels (except in 2009 when the "E" was very low) and just keeping what I have invested still there. You don't get "skinned" in the retreats, as you bought at lower levels and only add when the time is right.
Unlike an institution, you do not have to demonstrate to clients annual killer gains. You have only yourself to please. Asset preservation SHOULD BE a goal for everyone, but in up markets, people throw caution to the wind.
This market reminds me of the Japanese stock market in the late 1980s. Valuations were through the roof, but EVERYONE THOUGHT that Japan was going to rule the world economically, thus justifying to themselves the high valuations. Thirty years later and those stock prices have still not recovered.
There is something to be said for:
1. Buying cheap index funds with very little turnover, like Vanguard. Sure- you can make some killings on individual stocks, but you have to pay taxes and will have an equal number of dogs, if you are honest with yourself. Keep in mind that National Cotton and RCA were the stock market darlings of the past. An index fund allows you to rotate the dogs out and keep the solvent companies.
2. Buy stocks when the Schiller PE and CAPE values are low, and "let it ride" when they are high. The markets ALWAYS CORRECT AT SOME POINT and will give you a buying opportunity.
3. Most individual stock pickers LIE ABOUT THIER RESULTS. The fact of the matter is that you are best off with cheap index funds. I bought Apple when it was $5 a share and was presumed to be going bankrupt. One of my buddies ( a very wealthy guy) put $1 million in. I only bought 1,000 shares for each of my kids. That has gone through the roof. However, I also bought each 1,000 shares of Lucent, which has gone to ZERO.
If you want to do individual stocks, use 5-10% of your money as "play money" in which you pick stocks. Then compare your returns to those of the index.
4. It is easy to be viewed as an investing "guru" in up markets. See how someone performs in bear markets to get an idea of how good they are.
5. You are nuts if you think you can beat all the computer algorithms of the professionals. As an amateur, you don't have a chance.
"Buy the dip" is a mantra created by investment firms.
People NEVER gladly over pay for consumer goods, but are often delighted at overpaying for stocks. And, in contrast, they hate stocks when they are actually cheap.
I have missed part of upside gains by not buying above certain P/E levels (except in 2009 when the "E" was very low) and just keeping what I have invested still there. You don't get "skinned" in the retreats, as you bought at lower levels and only add when the time is right.
Unlike an institution, you do not have to demonstrate to clients annual killer gains. You have only yourself to please. Asset preservation SHOULD BE a goal for everyone, but in up markets, people throw caution to the wind.
This market reminds me of the Japanese stock market in the late 1980s. Valuations were through the roof, but EVERYONE THOUGHT that Japan was going to rule the world economically, thus justifying to themselves the high valuations. Thirty years later and those stock prices have still not recovered.
There is something to be said for:
1. Buying cheap index funds with very little turnover, like Vanguard. Sure- you can make some killings on individual stocks, but you have to pay taxes and will have an equal number of dogs, if you are honest with yourself.
2. Buy stocks when the Schiller PE and CAPE values are low, and "let it ride" when they are high. The markets ALWAYS CORRECT AT SOME POINT and will give you a buying opportunity.
3. Most individual stock pickers LIE ABOUT THIER RESULTS. The fact of the matter is that you are best off with cheap index funds. I bought Apple when it was $5 a share and was presumed to be going bankrupt. One of my buddies ( a very wealthy guy) put $1 million in. I only bought 1,000 shares for each of my kids. That has gone through the roof. However, I also bought each 1,000 shares of Lucent, which has gone to ZERO.
If you want to do individual stocks, use 5-10% of your money as "play money" in which you pick stocks. Then compare your returns to those of the index.
4. It is easy to be viewed as an investing "guru" in up markets. See how someone performs in bear markets to get an idea of how good they are.
5. You are nuts if you think you can beat all the computer algorithms of the professionals. As an amateur, you don't have a chance.
Yawn. You mean like those professionals from Harvard?
Anyone that has any type of long term time horizon has done relatively fine by just incrementally investing in the S & P with very little thought put into the process, using low expense ratio funds like Vanguard. Simple stock averaging has stood the test of time for quite some time.
P.S. And before you get into your cherry picking on inflation at 7% for the last 12 months, let's give the whole story and talk about the previous few years of inflation also so we can get an accurate picture (2.4, 1.8, 1.2). When you or anyone else can predict the future, you'll be on to something but right now you can't so let's not get silly and try to imply that we'll be at these high levels for years to come (because you don't know that).
Last edited by dicipher; 01-30-2022 at 11:45 AM..
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