Near All Time Highs - who's going to pull the trigger?

[Free bird]

S&P has returned 1.3% annualized the last 15 years. So when someone says sell & buy what you could say bonds cash real estate or whatever. What will the next 15 years bring? Who knows but wall st & the fraudulent financial system seems anything but a sure bet. Reward free risk for the next 15 years would surprise the majority of investors I'm sure.

 

[eta2020]

S&P has returned 1.3% annualized the last 15 years. So when someone says sell & buy what you could say bonds cash real estate or whatever. What will the next 15 years bring? Who knows but wall st & the fraudulent financial system seems anything but a sure bet. Reward free risk for the next 15 years would surprise the majority of investors I'm sure.

You fail to say that 1.32 is return Adjusted for Inflation and not counting dividends.

I will recompute with Dividends reinvested, not adjust for inflation and I will get 5.4% annual return in same 15 year period. You would had done much better if you had Mid Caps, Small Caps and a bit of International exposure during those 15 years.

https://dqydj.com/sp-500-return-calculator/

 

[Free bird]

30 year treasury bond yield May 2001 was 5.78%. With 15 years remaining. Seems like a better choice.

 

[eta2020]

30 year treasury bond yield May 2001 was 5.78%. With 15 years remaining. Seems like a better choice.

But I will pay no taxes on dividends up to 92k of income and if I mix in Small Caps and Mid Caps I will earn more than 6%.
That is 6.25% with low taxes

https://dqydj.com/wilshire-5000-return-calculator/

And hold those bonds for 15 more years and let us see what happens in environment of rising rates.

 

[WinterHaven]

I've reallocated about 7% over to bond funds for the summer...

 

[tmm99]

Folks, I don't mean to sound like a downer, but we've been here before. We are hitting the same DJIA 18,000 ceiling we have been hitting which was set at the end of 2014. The question is, will we break the ceiling finally to create a new resistance line?

 

[rodi]

Sticking with my asset allocation. I'm not good at market timing.

And since my BIL (who makes a lot of bad market timing moves) just told me that "a guy" told him to sell because the market was going to crash this fall.... I have more reason to stay the course. He's definitely a contrarian signal.

 

[NW-Bound]

Continue the ride by all means...

Charts like this make you think we're due for at least another 7 years of ~flatness in the cumulative return.

On wait - the chart ends at 2009, we're half way through 2016. So that's the 7 more years. So we could take off any year now, or not for another 9!

I was just thinking the same thing when looking at this chart, except that I wonder if we are not due for more than 17 years of lousy returns since 2000.

See, in the past the bear periods were always longer than the bull periods. So, as we had 17 years of exceptional performance in 1982-2000, perhaps we need to suffer 25 years of lousy performance to pay for this sin (1000% cumulative return!). Fundamentally, this multi-decade bear period could be the result of P/E contraction as many pundits fear.

Aye, aye, aye... Could be another 10 years of up/down but getting nowhere.

Early SS, here I come.

PS. Oh, and then when the 25-year period of famine ends, an asteroid may just hit earth and put us all out of our misery.

 

[ejman]

I was just thinking the same thing when looking at this chart, except that I wonder if we are not due for more than 17 years of lousy returns since 2000.

See, in the past the bear periods were always longer than the bull periods. So, as we had 17 years of exceptional performance in 1982-2000, perhaps we need to suffer 25 years of lousy performance to pay for this sin (1000% cumulative return!). Fundamentally, this multi-decade bear period could be the result of P/E contraction as many pundits fear.

Aye, aye, aye... Could be another 10 years of up/down but getting nowhere.

Early SS, here I come.

PS. Oh, and then when the 25-year period of famine ends, an asteroid may just hit earth and put us all out of our misery.

Dunno, such unbounded optimism is hard to resist...

 

[Free bird]

Your BIL is due to be right. Stall st could be Fall st. Ive got skin in the game but I dont trust these banker b*sturds not to steer us into the rocks again.

 

[RobbieB]

Better get your skin out of the game then before it hits the grinder.

 

[Totoro]

Thick skin. Grinder resistant.

 

[NW-Bound]

 

[gayl]

Or, we could rely on a rhyme, if only I could recall which one is always correct.

sell in May - then go away
sell in June - before the swoon
sell in July - don't ask why
sell in August - before it go bust

LOL .... all I'm sure of is that it'll be higher in 10+ years when I think about drawing on it

 

[Corporateburnout]

Your BIL is due to be right. Stall st could be Fall st. Ive got skin in the game but I dont trust these banker b*sturds not to steer us into the rocks again.

Why are you still in the game if you don't trust the players?

 

[explanade]

But I will pay no taxes on dividends up to 92k of income and if I mix in Small Caps and Mid Caps I will earn more than 6%.
That is 6.25% with low taxes

https://dqydj.com/wilshire-5000-return-calculator/

And hold those bonds for 15 more years and let us see what happens in environment of rising rates.

Huh, explain the no taxes on dividends.


I saw a brief scrawl on CNBC that small investors are making withdrawals from equity funds and buying bond funds?

 

[RobbieB]

Qualified dividends get special tax treatment.

 

[eta2020]

Huh, explain the no taxes on dividends.


I saw a brief scrawl on CNBC that small investors are making withdrawals from equity funds and buying bond funds?

Well compute taxes on 92k of income coming from qualified dividends.

Assuming this is all your income you (Married Couple) will pay 0 in Federal Taxes. Now if you feed into calculator 92k of Bond Interest you will pay 10k in Taxes .
http://www.moneychimp.com/features/tax_calculator.htm

And this kind of income is pretty much what you get from buy and hold of Equity Index ETFs. There will be maybe 10% in non qualified dividends and there will be Foreign Tax Credit on International ETFs. So you may end up with some negligible tax.

 

[explanade]

Hmm, I don't have any ETFs but individual equities and index funds.

Had more than this in dividends and cap gains distributions, mostly from equity index funds as a single filer.

I certainly paid taxes, though a lot of this dividend and cap gains distributions included no tax bond funds.

 

[eta2020]

I saw a brief scrawl on CNBC that small investors are making withdrawals from equity funds and buying bond funds?

95% of small investors will make maybe half of what ETFs that they buy make .

You know that is called Investor return versus Fund Return. That is because they always move money around following each other as a flock of sheep.

 

[Brat]

My IRA is invested in Realty Income Corporation whose share value has gone far beyond what I would pay for it. I sold just enough to meet my MRD today.

My practice is to re-invest dividends but am beginning to consider dividends to cash and await retrenchment of stock price when interest rates go up. Hummm.....

 

[explanade]

95% of small investors will make maybe half of what ETFs that they buy make .

You know that is called Investor return versus Fund Return. That is because they always move money around following each other as a flock of sheep.

But hasn't some market experts been saying market can't sustain upwards until the small or retail investors return?

And that they haven't really returned since the 2008 crash?

 

[Senator]

Part of my monthly buy kicked in today. 25 shares of DVY at 84. Typically, I buy ~$12k a month, so I have a few more shares to go. I have a few more triggers/limit orders to go next week.

I was buying IVV, but since I am closer to FIRE, I am doing DVY. It should be less volatile, and produce a few ore dividends. I do not have much in terms of bonds, so I concentrate on DVY.

In a few years, I will concentrate on Bonds. All my dividends can go to them.

 

[eta2020]

But hasn't some market experts been saying market can't sustain upwards until the small or retail investors return?

And that they haven't really returned since the 2008 crash?

I heard something along the lines that retail investors are still scared and it will take long time before they return.

They will probably return at euphoric peek of secular bull market. Contrarian sign to get out or at least not put new money into the market. Right now we do not see euphoric peek. So maybe we will have cyclical bear but hopefully within secular bull market.

But on long enough run all bear market are cyclical within one 200 year secular bull market.

 

[Free bird]

Just because I dont trust the players doesnt mean I wont play the game. It just means I play more carefully. Like playing football against a dirty player. Theres certain things you wont do. Certain risks you wont take that you would normally take. The banking system abandoned normal conduct & the spirit of fair play. Of course some people think there are no rules.