04-16-2021, 09:03 AM
(04-16-2021, 08:26 AM)EricL Wrote:Where else can people go to get a return on cash other than the stock market?(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.
That's the problem right there and that's why people just think buy anything and it will go up and you will make money
.And there are other ways to make money. Buy property, buy rentals, corporate bonds, art work, crashproof lol.
But lets get real for a second. Were over valued. Period. You can say the market will keep going up, and it may very well do so. But a correction is coming. You already seeing those hyped stocks get hammered. What's happening is people are selling those PLUG, TLRY CRSP of the world and buying dividend stocks. At some point money will come out of safety and back into the tech growth names. Rotation, rotation
Things will not open as fast as one thinks. It will take years before we got back to normal activates. And business cant even hire people because no one wants to work. And why work when you can sit home and get paid for sitting on your couch
I too am being cautious going forward. I sold names and bought 3 rental properties for monthly income. Renting to college students right now. my stocks are at 30%, bonds 20% and 40 cash and the rest in properties. I will stay that way for a while.