04-16-2021, 08:26 AM
(04-15-2021, 11:33 PM)divmenow Wrote:(04-15-2021, 10:55 PM)fenders53 Wrote:
It's getting tougher. Being all in if your entry is recent comes with considerable risk of waiting years to get back to even. We'll get a dip before long and see what happens. Everyone is programmed to buy a dip. That probably works a while longer. Earnings might make it a sector thing.
The market is over valued by 34.8 percent right now. I have the graphs and proof just how extended these valuations really are lol. I don’t need to sell everything and go 100% cash. Even if we drop 20% here I’m protected and my loss would be minimal. I’m protected and rebalanced to survive a big correction. So they could go to zero and I’m fine lol. My cash is earning .70% each month and that earns me enough where I’m happy while it wait. I am all about a correction. It’s needs to bring new money in . And they need to flush people out. It will be healthy and much needed. It’s just a matter of when.
Some sectors are already in bear territory. The dividend stocks will be next to retreat. Those lofty levels can’t be supported. The S&P is now priced for 2023 and beyond. I don’t have the why and why not answer. I’m just going by instincts. I can remember when the pandemic hit and at the time I lightened up and went 70% cash. That turned out to be a great idea and got back in at or near the lows. Now we’re way up and when near bankrupt companies are at all time highs. That’s scary to process lol . Just think about stocks like SIX, RRGB ect. The list is mile long. These companies are in trouble and won’t survive yet they get bid up. Lucky those investors for now lol
That’s all for now. We will see if the Bears attack or the bull keeps charging lol
Can you run that chart again and include interest rates with it? You can't really compare valuations now against against those from 30-50 years ago because we are in a completely different business and fiscal environment now than we were then.
Interest rates from the 70's-80's were over 10%, hitting as high as 20% in 1979. Think that skews the mean a bit?
We also didn't have the fed and fiscal programs pumping trillions upon trillions of dollars into the system like we do now.
Global interest rates are at or below zero around the globe now, bonds yield 1% or less.
Where else can people go to get a return on cash other than the stock market?
I'm not saying that things aren't overvalued, because there are plenty examples of things that are. But I have a hard time saying the overall market is overvalued by a certain percentage, when we are living in much different conditions than most of recent history.
A 1% bond yield is roughly the same return on investment as a 100 PE. Neither is a very attractive option, but at least you get the possibility of growth with the PE.