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Fear and Greed !
Old 01-12-2018, 02:39 PM   #1
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Fear and Greed !

Purely a speculative post. The bull has been running strong for nine years. How much longer will the bovine hold up at this current pace ?

I for one am totally clueless but it is fun to watch people who have never seen a serious downturn be so enthusiastic concerning the market today. I'm afraid when the party is over there may be some serious hurt going around.

Heard some friends in their 60 & 70s with 80% in equites bragging about their returns last years and just thought to myself, oh my, my.
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Old 01-12-2018, 02:54 PM   #2
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The tax cuts were a game changer and a large profit increase for many companies. It will run for a while yet.
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Old 01-12-2018, 02:57 PM   #3
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I was doing my first Roth conversion for this year. DW looking over my shoulder (who claims she has no idea about finances) stated that an upgrade in hotels for our vacation is in order. Lucky for me it was her IRA account. I have no idea how much longer this will last. However as long as the diveys and interest cover it I'm OK.
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Old 01-12-2018, 03:21 PM   #4
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Greed Trumps fear. Fear is a losers game.
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Old 01-12-2018, 03:36 PM   #5
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I have seen lots of serious downturns and I'm enthusiastic about the market today.

Age 62 and 75% in equities.
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Old 01-12-2018, 03:42 PM   #6
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I continue to gradually increase equities percentage as I age. Staying the course trumps fear.
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Old 01-12-2018, 03:56 PM   #7
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Quote:
The bull has been running strong for nine years. How much longer will the bovine hold up at this current pace ?
I look at it just like flipping a coin. The chances of the market tanking in 2018 is the same as it was 9 years ago. I see no evidence that any given year is related to the previous one. I set my course and I stay the course. I'm 65 and 75% equities. Would brag about last years returns? Sure. Would I bitch if we had a major correction? Absolutely. I'm human. Would I change my plan because I was afraid of losing some money? Not a chance!

If I listened to some of the pundits, I would have been out of the market 2 years ago. Where would that have put me?

Now, adjusting AA for age is a different story. Even though I am 65, I still are planning for >30 years out. Not ready to change AA just yet. But someday.....
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Old 01-12-2018, 04:08 PM   #8
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I'm thrilled with the long bull run but with the length and height of the current good times, it's getting dizzy up here. CAPE 10 is pushed way outside the comfort levels and it keeps getting stretched out more. I don't know when the party will be over but I do know that the market is cyclical and there will be a return to mean at some point. I'm trying to mentally brace myself for the eventual market correction. I know it's coming, I just don't know when. I have a 60/40 AA but when it does correct, I know it's still going to hurt.
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Old 01-12-2018, 04:10 PM   #9
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Originally Posted by CRLLS View Post
I look at it just like flipping a coin. The chances of the market tanking in 2018 is the same as it was 9 years ago. I see no evidence that any given year is related to the previous one. I set my course and I stay the course. I'm 65 and 75% equities. Would brag about last years returns? Sure. Would I bitch if we had a major correction? Absolutely. I'm human. Would I change my plan because I was afraid of losing some money? Not a chance!

If I listened to some of the pundits, I would have been out of the market 2 years ago. Where would that have put me?

Now, adjusting AA for age is a different story. Even though I am 65, I still are planning for >30 years out. Not ready to change AA just yet. But someday.....
My thinking is like yours. My AA is the same as yours and don't plan to change and will ride out the storm when it happens.
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Old 01-12-2018, 04:11 PM   #10
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Most likely investors in their 60s & 70s HAVE seen serious downturns. Many of the people in their 20s and 30s I hear from are not in the market because it is "rigged" or a just a dangerous gamble. There is a middle ground between outright fear and irrational exuberance. Most on this site walk that balance well.
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Old 01-12-2018, 04:11 PM   #11
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I'd actually feel better if the market took a breather, say after a 5-10% from current levels with no major changes to fundamentals. Otherwise, I'm comfortable.
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Old 01-12-2018, 04:28 PM   #12
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The tax cuts were a game changer and a large profit increase for many companies. It will run for a while yet.
Yeah, I think that pretty well sums it up. Don't take your chips off the table yet, just keep watching until you see a trend develop.
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Old 01-12-2018, 04:47 PM   #13
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The Market.......

Dilley Dilley!
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Old 01-12-2018, 04:55 PM   #14
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Have we reached irrational exuberance yet? My feeling is not yet, but it's getting closer. Since all I can do is guess, I would say the closer we get to 3 on the 10 year , the more dangerous it is for the stock market. Still with the tax cuts, that provides some more fuel but I am still leery. Interest rates rising too high to me is the biggest known risk .

What I fear is the Fed will have to jack up rates too fast and the market can't handle it. This of course is not the only risk in the market, there are many, but this risk I can clearly see. But right now the stock market is alive and well.
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Old 01-12-2018, 05:05 PM   #15
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The financial press is saying that small investors are crowding into equities in the last few days. Sounds like it's time for anther round of irrational exuberance that will take us higher and higher. As always, you can't see where the end will come. It always seems to be sudden and steep so you can jump out in advance. Despite my irrational exuberance I plan to rebalance down to my 60/40 AA frequently if we keep going up.
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Old 01-12-2018, 05:08 PM   #16
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I'm fearful of others' greed.
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Old 01-12-2018, 05:10 PM   #17
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I have always appreciated the wisdom of Bernard Baruch.

When asked how he got so wealthy, his answer was "I always sold too soon."
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Old 01-12-2018, 05:45 PM   #18
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I will do rebalance to maintain 70/30 or lower equities. No need to play hard when I have won the game. Of course, I am playing for the long run (not out pf the market).
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Old 01-12-2018, 06:18 PM   #19
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One theory says that with the tax-cuts most companies get an immediate bump in earnings that will drive the P/E ratio into more normal territory, thus giving room for more price gains.

Maybe. Maybe not.
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Old 01-12-2018, 06:26 PM   #20
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One looks at this market as running out of fuel, but ignore that with tax cuts and other changes in regulations new fuel as been tossed on the fire. Sure it can crash, but it can also go up. And is there anything that would prevent this from just going sideways for a period of time? To the best of my knowledge there has never been a period in US history that is even similar to the financial and economic environment we are today.

There are been those here who have called for market correction almost every year since the market rebounded. There are also "experts" who have done the same. Say it often enough and eventually you'll be right. For me, I'm sticking with my disciplines that have left money on the table in the past few years and hopefully prevent me from crashing and burning should times get tough. Get a plan, stick to the plan, don't panic, get rewarded.
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