SP500 moves off major lows

[Lsbcal]

This is my yearly updated chart. It shows the SP500 after major market lows (see blue line). The market has basically risen for 93 months! One thing this chart shows is that this old bull market is not an anomaly.

I hope forum members have enjoyed the ride so far. FWIW, I'm getting nervous about this market but that is my usual state.

 

[Totoro]

Tell me about anxiety. Euro drops like a stone and equity valuations keep going up.

It's a double positive whammy upwards, so I'm now bracing myself for the double whammy downwards ..

In other words, nothing changed

 

[Al18]

Thanks. Your data seems to be primarily from 1970 to current, but 1990 to 2002 data is missing. Why?

 

[Meadbh]

Am I the only person who can't see the chart?

 

[Lsbcal]

Thanks. Your data seems to be primarily from 1970 to current, but 1990 to 2002 data is missing. Why?

Good question. The 1990's bull market didn't appear to come off a major low that was easy to identify. There was the 1987 crash which was not followed by a recession. I guess I think of declines that are major and caused by recessions as major lows.

Actually my favorite way of charting markets is a decades chart. Using the same data as the above chart but it is continuous from the 1940's. It is basically an SP500 chart (with dividends and inflation adjusted) that is segmented by decades. Here it is:

 

[W2R]

This is my yearly updated chart. It shows the SP500 after major market lows (see blue line). The market has basically risen for 93 months! One thing this chart shows is that this old bull market is not an anomaly.

I hope forum members have enjoyed the ride so far. FWIW, I'm getting nervous about this market but that is my usual state.

Nice!

Like you, I'm expecting a huge market crash any minute but have been for several years by now. Anyway, the way I deal with that is to position myself better in case it happens, and run "what if" scenarios to prove to myself that it won't mess up my retirement.

I think that lowering my bare bone expenses, and spending the savings on discretionary stuff instead, is always good. Then if/when the market crash happens, it will be easier to cut back on my spending than it might otherwise be.

I'm working on a hypothetical "market crash budget" that is covered almost entirely by various income streams of mine that are not dependent on the market, like SS and pension and so on. Having some cash to supplement those income streams for a few years is another safety net, as is being debt free with no mortgage to pay. Of course that means I have less money in the market than I otherwise would have, so I am earning less, but that is OK with me because I am such a safety junkie.

Am I thee only person who can't see the chart?

Yes. I left it in my quote of his post, in case that helps.

 

[Spanky]

yup! Enjoy the nice ride of the U.S. stock market while it lasts! What's next is anybody's guess. We just stay the course (50/50, equity/fixed income).

 

[Al18]

OK - thanks for the explanation and great charts.

More evidence the bull run is ending soon. I'm still investing in individual stocks and don't see anything worth buying with current P/E ratio's - so my cash balance is just increasing in the account.

 

[Lsbcal]

OK - thanks for the explanation and great charts.

More evidence the bull run is ending soon. I'm still investing in individual stocks and don't see anything worth buying with current P/E ratio's - so my cash balance is just increasing in the account.

Careful there. I don't see any evidence in the above charts for the next market moves, either up or down.

I use these charts as a way to compare market history .... only.

FWIW, although market valuations are above historical norms they are not at nose bleed levels I think. Of course, valuations are always debatable. Also look at that second decades chart. See that 7 growth rate line (red dotted line on this semilog plot) which shows historical inflation adjusted SP500 growth. Its slope is similar to recent year's SP500 performance (the slope of the blue line from month 40 or so to the present month 84). In other words, in recent years the market has not had a wild ride up.

 

[razztazz]

Am I the only person who can't see the chart?

I cannot see it either with CHROME

In Firefox I can see it

 

[Meadbh]

I cannot see it either with CHROME

In Firefox I can see it

Well, that's interesting, because I cannot see the first chart in Safari, but I can see all the charts in Chrome!

 

[REWahoo]

I couldn't see it in Chrome until I refreshed the page.

 

[razztazz]

Well, that's interesting, because I cannot see the first chart in Safari, but I can see all the charts in Chrome!

Interesting! I'm gonna open another bottle and see if that helps

 

[Meadbh]

Interesting! I'm gonna open another bottle and see if that helps

It's too early in the day for that!

 

[razztazz]

So, for those of you who see a "major crash" coming, which I think is most of you, how big a crash do you see? 20-ish%? Not that big of a deal. 50-ish% knee in the groin hurt? Over 50% --- 1929-ish?

 

[Spanky]

I cannot see it either with CHROME

In Firefox I can see it

The images show up fine with Chrome. You may need to clear cookies and caches, disable some of the plugin/extension.

 

[Spanky]

So, for those of you who see a "major crash" coming, which I think is most of you, how big a crash do you see? 20-ish%? Not that big of a deal. 50-ish% knee in the groin hurt? Over 50% --- 1929-ish?

If we believe in reversion to the mean, the drop would be 40.34% based on the current P/E of 26.2 and the average P/E of 15.63.

 

[razztazz]

The images show up fine with Chrome. You may need to clear cookies and caches, disable some of the plugin/extension.

I figured it had something to do with that. Altho I can see the second chart OK.

 

[Bigdawg]

I also am concerned about a potential market crash. Here is my question: if you are living off of your stash (no new earned income from a job-no pension) then wouldn't you have an absolute min of one yr in cash and a couple years in bonds? Easy for me to say because I am sitting here (me and DW) with 2 COLA pensions at 6 fig's/year. Even with that I am not 100% equities and I have almost 1 yr in cash. I would like to think that if I did not have the pensions I would go 2-5 yrs cash and a few more years in bonds. I also have numerous side hustles (real estate, baseball umpire, volleyball ref, door man occasionally). Although it would suck, a huge (say 50%) market crash wouldn't be so bad. A buying opportunity.

 

[bradaz2488]

Sitting on ~10 years expenses of Bonds/Cash. My current AA is 52/18/30. Not going to put any more into equities at these levels. Been retired 3.5 years and my portfolio is 11% higher then the day I retired. I could be wrong (usually am) and equities could continue to go much higher from here. Bottom line for me is being able to sleep at night and as long as my portfolio value is tracking close to "Plan" then I'm good. I try not to be greedy ...

 

[razztazz]

If we believe in reversion to the mean, the drop would be 40.34% based on the current P/E of 26.2 and the average P/E of 15.63.

Thanks . That's pretty close to what I'm seeing/thinking/ feeling/sensing/judging

 

[razztazz]

Sitting on ~10 years expenses of Bonds/Cash. My current AA is 52/18/30. Not going to put any more into equities at these levels. Been retired 3.5 years and my portfolio is 11% higher then the day I retired. I could be wrong (usually am) and equities could continue to go much higher from here. Bottom line for me is being able to sleep at night and as long as my portfolio value is tracking close to "Plan" then I'm good. I try not to be greedy ...

That's about where I am. And on top of that I have no qualms about heading for the dugout if things start looking serious.

 

[DrRoy]

No problem in Chrome.
Have loved the ride since '09.
Great chart. Shows that you can't market time based on length of the run (or anything else really).
Over 2 years have reduced my equity AA from 82% to 61. RE in 2.75 months.

 

[W2R]

So, for those of you who see a "major crash" coming, which I think is most of you, how big a crash do you see? 20-ish%? Not that big of a deal. 50-ish% knee in the groin hurt? Over 50% --- 1929-ish?

I would consider 20% to be a little bobble, not a crash. I am running scenarios that are much more serious than that, for example one in which my 45:55 portfolio is 60% gone. If I am prepared for a 1929-ish crash, then whatever happens will be easy to cope with.

That said, I do not, not, NOT realistically expect such a major crash as that at any time soon. No way. I am a worry-wart and I know it. I just feel better if I have a plan to survive such a thing and have mentally run through what I would do in such an event. It's like doing fire drills back when we were in elementary school.

I also try to look at the possibility of runaway inflation, but that is much more difficult for me to handle. To me that is the most frightening of all and I really haven't done a good job of mentally or financially preparing for such an eventuality.


No problems seeing anything with MSIE.

 

[Lsbcal]

I would consider 20% to be a little bobble, not a crash. I am running scenarios that are much more serious than that, for example one in which my 45:55 portfolio is 60% gone. If I am prepared for a 1929-ish crash, then whatever happens will be easy to cope with.
...

The VPW tool allows one to set the AA and see the inflation adjusted totals over start years that you can choose (1871 is the earliest).

Since this is an open spreadsheet, one can see the data very transparently (unlike FireCalc). If you are mildly proficient with spreadsheets then you can even set the withdrawals according to an arbitrary formula of your choosing rather then the VPW one.