Re: Go all in or easy does it?
Thats pretty much what I think too Wahoo. Anything can happen and I dont know and neither do any of the 'experts'. The difference is that I'll openly admit it.
I'm not into creating graphs to show me what I already want to see, and I dont know where the market is going. I didnt like equities 2 years ago or even a year ago, feeling they were overpriced, but earnings have continued to uptick and now I feel ok with them. I still held stocks the last 2 years and made plenty of money on them, overpriced though they might have seemed to me.
Good asset allocation still wins the day, and admitting that you dont know where things are going to go is the first hard step.
Now if things were really nutty, like they were in 1999, i'm with the 'wow, thats expensive, dont own that asset class!' crowd. But a P/E thats 5-10% over long term historic 'norms' doesnt make me twitch. And real estate is very overpriced in a lot of areas, no argument. But I dont know if anythings going to pop or slide or go sideways or go up.
Here's an indicator that works almost all the time though, and appears to have much better consistency than the ones that have been bandied about in this thread. Plot the s&p 500 and the 200 day moving average. When the average dips below the price line for 5 trading days, sell. When it moves above the price line for 5 trading days, buy. This approach would have kept you out of stocks for almost all of the downturns in the most recent 25-30 years and probably further back than that but I'm too lazy to look. Would have had you all in for the upturns.
The price chart has bounced off the 200 day MA a couple of times in the last year, and even done a few short dips below, but right now its in solidly saying to Own 'Em Baby.
Check it out with your favorite charting product...its pretty accurate...historically speaking...
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.