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Started By
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market thoughts...bubble?
Posted on 2/16/17 at 11:14 am
Posted on 2/16/17 at 11:14 am
(no message)
This post was edited on 12/5/18 at 2:01 pm
5
Posted on 2/16/17 at 11:19 am to bluemoons
There could be a small bubble but with Trump's tax plan idk.
Posted on 2/16/17 at 11:30 am to bluemoons
I always take some gains. Maybe 10% off the top. If you don't take gains and go to some cash, you really don't have any gains, you have unrealized gains.
My thought process is that it is going to go down and correct. Always does. When it does I have readily available cash (the gains I took throughout the life of whichever bull market we are in).
Others like to stay all in, all the time. I don't think that makes sense, but that is a very popular thing to do. In the long run it always seems to work. Unless you are getting ready to retire and the correction happens around that time. Then come the news stories about 70 year olds who can't retire. I always wonder who gave them the advice to not take a realized gain and stay all in.
My thought process is that it is going to go down and correct. Always does. When it does I have readily available cash (the gains I took throughout the life of whichever bull market we are in).
Others like to stay all in, all the time. I don't think that makes sense, but that is a very popular thing to do. In the long run it always seems to work. Unless you are getting ready to retire and the correction happens around that time. Then come the news stories about 70 year olds who can't retire. I always wonder who gave them the advice to not take a realized gain and stay all in.
Posted on 2/16/17 at 12:56 pm to bluemoons
Sounds like you're young and will not a whole lot of skin in the game you shouldn't be getting yourself caught up in what if scenarios with a long term strategy. The market could very well run to 22,000 on the Dow and then correct back to 20,000, then what? You've missed out on all those dividends along the way.
If this money is for a short term goal within 5 years then yea you probably should be shifting your allocation more conservatively.
If this money is for a short term goal within 5 years then yea you probably should be shifting your allocation more conservatively.
Posted on 2/16/17 at 1:22 pm to Iowa Golfer
quote:
I always wonder who gave them the advice to not take a realized gain and stay all in.
or switch to more fixed income conservative investment choices? Even if you have everything on monthly paying dividend stocks you can always get stopped out and get back in later......provided the imvestor has enough cash or other means of income to last until they are back receiving dividends again. This is all in reference to someone who is retired.
This post was edited on 2/16/17 at 1:29 pm
Posted on 2/16/17 at 2:46 pm to bluemoons
Only twice in history has the shiller pe ratio for the s&p 500 been as high as it is now: dot com bubble and the months leading up to black Tuesday (start of the depression). I've switched from buying equities as of late and started targeting bonds, as the yields are looking better and better each day. I'm not sure if a pullback is coming, but the market is certainly overvalued compared to historical trends.
My thesis is one of three things will happen: a) earnings will rise faster than price, justifying current valuations, b) there will be a pullback, or c) current valuations will become the new normal. I'm not dumping equities at this point, but I'm definitely in wait and see mode.
My thesis is one of three things will happen: a) earnings will rise faster than price, justifying current valuations, b) there will be a pullback, or c) current valuations will become the new normal. I'm not dumping equities at this point, but I'm definitely in wait and see mode.
Posted on 2/16/17 at 2:51 pm to Shepherd88
quote:
Sounds like you're young and will not a whole lot of skin in the game you shouldn't be getting yourself caught up in what if scenarios with a long term strategy. The market could very well run to 22,000 on the Dow and then correct back to 20,000, then what? You've missed out on all those dividends along the way.
Those are precisely my thoughts.
The other side of my brain acknowledges that while the money I have tied up in Vanguard's 2055 TDF isn't all of my portfolio, it is a sizable portion of it
. I'm just acutely aware of the potential that we're either a.) in a bubble, or b.) nearing the end of the bull cycle anyway, so one way or the other I'm going to have to stomach some type of change likely sooner rather than later. Market cap ratio is 122% right now, fwiw.Posted on 2/16/17 at 2:53 pm to chongo
quote:
Only twice in history has the shiller pe ratio for the s&p 500 been as high as it is now: dot com bubble and the months leading up to black Tuesday (start of the depression). I've switched from buying equities as of late and started targeting bonds, as the yields are looking better and better each day. I'm not sure if a pullback is coming, but the market is certainly overvalued compared to historical trends.
My thesis is one of three things will happen: a) earnings will rise faster than price, justifying current valuations, b) there will be a pullback, or c) current valuations will become the new normal. I'm not dumping equities at this point, but I'm definitely in wait and see mode.
You and I have similar thoughts here. The only thing I would add is that earnings would have to rise a whole hell of a lot faster than they have been in order to catch up with price. If current valuations become the new normal, I'm a happy human
.This post was edited on 2/16/17 at 2:54 pm
Posted on 2/16/17 at 6:47 pm to chongo
quote:
Only twice in history has the shiller pe ratio for the s&p 500 been as high as it is now: dot com bubble
Comparing today's CAPE ratio to 1999/2000 is very misleading, companies going public then were magically valued pre-revenue. Investing in value stocks at that period was a great investment move. That was about 11 years in for me and worked out well, and it pissed me off people kept making money on tech companies worth nothing until it blew up in their faces.
Posted on 2/16/17 at 7:27 pm to bluemoons
We may be in for a slight pull back when first quarter earnings start coming out and they don't quite match reality.
Until then, I think the market is trying to adjust from an interest rate market into an earnings driven market. This long growth/low interest rate environment is a reason why you can't judge the market just for being a little long in the tooth. We haven't seen a market like this.
All this is building on anticipation of Trump's lower tax plan, if it doesn't go through then watch out!
Until then, I think the market is trying to adjust from an interest rate market into an earnings driven market. This long growth/low interest rate environment is a reason why you can't judge the market just for being a little long in the tooth. We haven't seen a market like this.
All this is building on anticipation of Trump's lower tax plan, if it doesn't go through then watch out!
Posted on 2/16/17 at 8:23 pm to Iowa Golfer
quote:
Others like to stay all in, all the time. I don't think that makes sense, but that is a very popular thing to do. In the long run it always seems to work. Unless you are getting ready to retire and the correction happens around that time. Then come the news stories about 70 year olds who can't retire. I always wonder who gave them the advice to not take a realized gain and stay all in.
It makes perfect sense, unless you're about to retire. But that's not an issue of timing the market; that's an issue of timing your life. If you aren't moving away from equities within ten to fifteen years of retirement, you're a fool and a gambler.
If you do so before, I believe you to be a fool and a gambler.
Posted on 2/16/17 at 8:27 pm to chongo
P/E ratio is also taking into account the 10 year treasury being at historical average levels... which it's not.. so there's a strong argument that if you take into account a 10 yr even at 4% then the S&P 500 is currently 15% discounted.
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