Current stock market valuation
I am genuinely thinking of selling all my stocks and just sticking it in a savings account for a few years.
The Buffett Indicator says that the market is very overvalued. However, there are other factors nowadays such as the fact that we are a globalized world and many earnings are from overseas. However, these rate rises and high stock prices makes me think either a crash could happen at some point, possibly soon, or returns will simply be very low, maybe lower than the 5% I can easily get in a savings account.
Talk to people at Bogleheads will clearly be against this since they will probably claim it is market timing etc. However, my instinct tells me this may not be a bad move.
Thoughts?
8 Replies
Dont bother trying to do your own 'homework', let the market do that for you
Ex - MSFT at 35x ntm is the money weighted sum of the worlds homework, even if you think its way too high. Thats easily 10s of thousands of hours of analyst spreadsheet grinding and dca modeling all summed up for you in the price. If you think your 10 minutes of homework are better, you are just a fool.
Dont fight it, just accept it
There is some narrative I hear that makes me puzzle on how people can still be so positive on the S&P .
I feel the bull are just betting on a devaluation of the US dollar and not the growth of corporations .
Smell like Japan Nikkei 1989 .
https://www.federalreserve.gov/econres/f...
I heard in other video the entire US office real estate value equal or ev
do you understand that if the dollar gets devalued (lol, devalued compared to what?), its better for the SP500?
inflation is more than 5%, therefore 5% isnt risk free
Credit risk is essentially zero
Duration risk and inflation going up risk are non zero
Not one single time in history that the market kept went higher and higher like it is and things didn't end badly. Actually, the more it keeps going and making a fool of the bears, the worse it will be when the end actually comes. Biggest problem with market timing in my opinion is not selling right now and staying out of this BS, but the fact I'm pretty confident you guys (maybe myself lol) will not come back when the blood is on the streets. Most of us will be in panic at that moment. That is the issue.
My advice is actually following some Graham-like Intelligent Investor approach of 50/50 stocks/bonds, or 60/40 (isn't that what Bogleheads recommend), and keep the discipline. 100% stocks, well, good luck remaining invested if/when **** happens.
Past performance is not an indicative of the future, and yet, so many people do just that, over and over.
do you understand that if the dollar gets devalued (lol, devalued compared to what?), its better for the SP500?
inflation is more than 5%, therefore 5% isnt risk free
Huh yes ?
I feel the bull are just betting on a devaluation of the US dollar
I said it in the quoted you posted ?
It’s risk free in the sense you will get your money back .
The value is an entirely different thing .
Past performance is not an indicative of the future, and yet, so many people do just that, over and over.
People are idiots - just throw your money in an SP500 index fund, forget about it for 10 years, and come back. Instead people think they can time the market or predict all this other BS and end up not beating the SP500 return.
