(This thread is intended for members who have skin in the game, but of course all are welcome.)
So what do you think the current environment has in stock for smaller investors?
I find the broad US markets to be way overbought, and there *will* be a significant correction (say at least 15%) within the next two years. The P/E ratios of all the major indexes are in the stratosphere (in laymens terms what this means is buyers are paying a huge premium for future earnings).
Earnings how to come up *way* higher than the most optimistic outcome of the new tax law in order to justify those multiples by historic measures.
I've seen this before, in 1999. My portfolio lost at least a third of it's value when the bubble burst in 2000. This, this feels like "irrational exuberance" that Greenspan correctly warned against.
2008 was different but I weathered that by going 40% to bonds. I didn't suffer the kinds of losses that people fully invested in equities did. They got shellacked.
Still, the markets are going up and I'd be fool to pass up this bull market while it lasts.
In October 2016 I was 100% in equities, except to the extent that any fund manager might incidentally hold cash, bonds, or derivatives). November 2016 I went to about 80/20 equity/bond, then 70/20/10 equity/bond/cash, then ditched most of the bonds for cash, and finally I moved most of the cash into conservative lower risk mutual funds and the rest into international mutual funds. japanese and Euro stocks are trading at much more reasonable multiples.
What are you doing? Where do you think the market is going?
So what do you think the current environment has in stock for smaller investors?
I find the broad US markets to be way overbought, and there *will* be a significant correction (say at least 15%) within the next two years. The P/E ratios of all the major indexes are in the stratosphere (in laymens terms what this means is buyers are paying a huge premium for future earnings).
Earnings how to come up *way* higher than the most optimistic outcome of the new tax law in order to justify those multiples by historic measures.
I've seen this before, in 1999. My portfolio lost at least a third of it's value when the bubble burst in 2000. This, this feels like "irrational exuberance" that Greenspan correctly warned against.
2008 was different but I weathered that by going 40% to bonds. I didn't suffer the kinds of losses that people fully invested in equities did. They got shellacked.
Still, the markets are going up and I'd be fool to pass up this bull market while it lasts.
In October 2016 I was 100% in equities, except to the extent that any fund manager might incidentally hold cash, bonds, or derivatives). November 2016 I went to about 80/20 equity/bond, then 70/20/10 equity/bond/cash, then ditched most of the bonds for cash, and finally I moved most of the cash into conservative lower risk mutual funds and the rest into international mutual funds. japanese and Euro stocks are trading at much more reasonable multiples.
What are you doing? Where do you think the market is going?
