Stocks are going higher...

[moneymaker]

Stocks are going higher. Throughout all the negative media publicity, impeachment, coronavirus, Iran, Russia, you name it, stocks Keep pushing higher. They will continue much higher for the next several years I believe as more and more folks pour money into the markets for fear of missing out....i think today is like 1998-2000 again...
Anyone else think this?

 

[RobbieB]

Yeah. I'm glad I sold a hundred G's a couple of weeks ago and I'm also glad I didn't sell more!

 

[pn3069]

The P/E of the stock market is relatively very high.. and earnings growth for this year appear questionable across the globe.

So, if P/E expansion continues, yes the market can go higher but I doubt it. I certainly do not think it is because of FOMO.

 

[GenXguy]

Stocks are overvalued. We saw a 20% drop late in 2018 before recovering in 2019, and I think there are concerns for a much bigger drop ahead for better reasons.

I'm only 42% equities now, so I'm prepared for whatever happens.

 

[COcheesehead]

The Boomers are aging. Demographics drive things more than we can imagine. Think like a Boomer and you’ll know where to put your money.

 

[street]

I can't remember where I read it at but some financial guru's were saying 30,000 DJIA by sometime in March. They just weren't guessing they had their reasons and science behind their prediction. I know just another prediction but it wouldn't surprise me either.

 

[pn3069]

I can't remember where I read it at but some financial guru's were saying 30,000 DJIA by sometime in March. They just weren't guessing they had their reasons and science behind their prediction. I know just another prediction but it wouldn't surprise me either.

With easy money from the central banks, that would not surprise me either. The question really is how much longer can the P/E expansion continue?

In the mean time, I have greatly reduced my position in US equities and am currently overweight International equities.

 

[NYEXPAT]

Short EM, Long silver,long miners. I we hold 3190 this week will go long S&P for the run to to 3700, if not will wait for the bottom at 3155-3190 and then go leveraged long small caps.

 

[HadEnuff]

The Boomers are aging. Demographics drive things more than we can imagine. Think like a Boomer and you’ll know where to put your money.

I am a Boomer and I'm clueless.

 

[HadEnuff]

Yeah. I'm glad I sold a hundred G's a couple of weeks ago and I'm also glad I didn't sell more!

Exactly where I'm at. I am as prepared as I can be for whatever scenario I can imagine. What scares me are the scenaria I haven't imagined yet.

 

[John0019]

Stocks are going higher. Throughout all the negative media publicity, impeachment, coronavirus, Iran, Russia, you name it, stocks Keep pushing higher. They will continue much higher for the next several years I believe as more and more folks pour money into the markets for fear of missing out....i think today is like 1998-2000 again...
Anyone else think this?

I certainly hope so. It really is incredible how resilient the market has been no matter what negatives get thrown at it. Not sure if it is FOMO or maybe TINA (there is no alternative), or liquidity, but whatever it has shrugged all the bad stuff aside for sure. Now where it goes from here who knows? I could see it fairly higher than it is now in a couple/3 years but not without some anxious moments (circa late 2018). Would feel better about it if we had more of a pull back (5%, 10%, etc) in the near term. Feels pretty toppy to me right now but staying long with current positions...gut does tells me to get some insurance so probably time for a few more SP500/SPY puts.

 

[24601NoMore]

Hard to say..on the one hand, stocks appear insanely over-valued by metrics like CAPE 10 - which is at the third highest level in the entire history of it being tracked.

On the other hand, with interest rates as low as they are, there's virtually nowhere else to put money.

It would seem that rates are driving the markets more than anything. All those $$s need to go SOMEWHERE, and cash is a negative real return and bonds are essentially zero real return.

 

[Dtail]

Hard to say..on the one hand, stocks appear insanely over-valued by metrics like CAPE 10 - which is at the third highest level in the entire history of it being tracked.

On the other hand, with interest rates as low as they are, there's virtually nowhere else to put money.

It would seem that rates are driving the markets more than anything. All those $$s need to go SOMEWHERE, and cash is a negative real return and bonds are essentially zero real return.

I will go with that. lol

 

[DrRoy]

The Boomers are aging. Demographics drive things more than we can imagine. Think like a Boomer and you’ll know where to put your money.

That's true, and demographics are important. However, Millennials are a bigger group and are now coming into their prime years.

That said, I am on a course where as the market rises, I reduce my AA slightly since I no longer need the equity exposure.

 

[audreyh1]

Hard to say..on the one hand, stocks appear insanely over-valued by metrics like CAPE 10 - which is at the third highest level in the entire history of it being tracked.

On the other hand, with interest rates as low as they are, there's virtually nowhere else to put money.

It would seem that rates are driving the markets more than anything. All those $$s need to go SOMEWHERE, and cash is a negative real return and bonds are essentially zero real return.

It’s asset inflation. Investors have already piled into stocks because they perceived nowhere else to put their funds. So you pile more?

And no, cash does not currently have a negative real return. You have to keep your eyes open. There are short term options meeting or exceeding inflation, and exceeding bonds in many cases.

I don’t invest in bonds to beat inflation. They are there to reduce portfolio volatility from stocks.

 

[EvrClrx311]

Yes, we are approaching the cliff, we just can't see it in the dark.

 

[Lsbcal]

It’s asset inflation. Investors have already piled into stocks because they perceived nowhere else to put their funds. So you pile more?

And no, cash does not currently have a negative real return. You have to keep your eyes open. There are short term options meeting or exceeding inflation, and exceeding bonds in many cases.

I don’t invest in bonds to beat inflation. They are there to reduce portfolio volatility from stocks.

A minor quibble but I am mentioning it because maybe you know something I do not. Vanguard MM Prime is currently yielding 1.64%. And 5 year TIPS are at -0.20%. You have to go out 20 years to get a real rate of return on TIPS. So that seems like maybe a slightly negative real return now. Does not stop me from holding a fair amount of cash to cover some heavy expenses this year (big taxes, new car, etc.)

Anyway I agree that money is seeking a return and stocks are currently the "it" place.

 

[OldShooter]

Stocks are going higher. Throughout all the negative media publicity, impeachment, coronavirus, Iran, Russia, you name it, stocks Keep pushing higher. They will continue much higher for the next several years I believe as more and more folks pour money into the markets for fear of missing out....i think today is like 1998-2000 again...
Anyone else think this?

So you have a large position in long-dated calls?

Me neither.

The only prediction that I have found to be absolutely reliable is one attributed to JP Morgan. When asked what the market would do in the next year he responded "It will fluctuate."

IMO any investor attempting predictions would be well served by reading Nate Silver's "the signal and the noise," particularly the chapter on economic forecasting. (Good used copies go from $4 plus shipping on Amazon and probably as a free downloadable e-book from your favorite library.)

 

[EvrClrx311]

Articles like this...

https://www.cnn.com/2020/02/08/investing/investing-retirement-stocks-bonds/index.html

lead me to believe a sizable correction is coming sooner than we think...

to paraphrase the article: Stocks are a no brainer right now, people in their 60's should invest like Millenials and not miss the returns by diluting your investments with bonds

What's woven into this article, the Millennial mindset, is the alarm bell to me. Generational mindsets of investments/savings are shaped by market conditions during key investments years (particularly heavy on our mindset is what happens in our 20's and 30's) as we assess what savings and investments can do for us. My great grandfather was was born in 1900 and lived to 2005, and I saw the lessons he learned from his 20's and 30's carry with him through his 90's...

Millennials today, no doubt think that "this time it's different" and they have this stock market thing figured out. Just go 100% stocks, ride the wave. Even if it corrects, it'll get back to new highs soon. The mindset correction will come with the market correction.

 

[Dtail]

So you have a large position in long-dated calls?

Me neither.

The only prediction that I have found to be absolutely reliable is one attributed to JP Morgan. When asked what the market would do in the next year he responded "It will fluctuate."

IMO any investor attempting predictions would be well served by reading Nate Silver's "the signal and the noise," particularly the chapter on economic forecasting. (Good used copies go from $4 plus shipping on Amazon and probably as a free downloadable e-book from your favorite library.)

Old Shooter has pounded this concept frequently and I for one am grateful for it.
When all said and done, there is a randomness and no one knows nuthin.

Still waiting for Gundlach's 3.5% 10 yr yield prediction to be correct....

 

[COcheesehead]

There's a whole group of investors, likely in their 30's, who have never experienced a bear market.

 

[target2019]

I must find an appropriate Asset Allocation.
I must set an appropriate Asset Allocation.
I must follow an appropriate Asset Allocation.
...

 

[corn18]

I must find an appropriate Asset Allocation.
I must set an appropriate Asset Allocation.
I must follow an appropriate Asset Allocation.
...

I love my 60/40 AA, but I'm not sure I like having stocks and bonds being expensive. I am considering moving my bond AA from total bond to stable value in my 401k.

 

[Montecfo]

Stocks are going higher. Throughout all the negative media publicity, impeachment, coronavirus, Iran, Russia, you name it, stocks Keep pushing higher. They will continue much higher for the next several years I believe as more and more folks pour money into the markets for fear of missing out....i think today is like 1998-2000 again...
Anyone else think this?

Stocks are far cheaper now than then. With lower interest rates and lower taxes.

I see the comparison but only from afar.

 

[Montecfo]

Most corrections are not long lasting affairs.

The possibility of an uptick in inflation and resultant higher interest rates and low returns over a longer period are of greater concern in my view.

Also, CAPE 10, while interesting, is a very ineffective timing tool.