haha
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Sean Darby Warns Against Relying On CAPE - Business Insider
Jeffries analyst criticizes CAPE (PE10).
Ha
Jeffries analyst criticizes CAPE (PE10).
Ha
"There are a number of reasons that investors should be careful relying solely on one valuation model to determine whether the equity market is under or overvalued," said Darby.Sean Darby Warns Against Relying On CAPE - Business Insider Jeffries analyst criticizes CAPE (PE10). Ha
Valuation of the equities market is one thing. It's valuation relative to the other alternatives is also a consideration of a portfolio mixture. This facet has abnormally high relevance in this time of low interest rates.
Agree with all this. To be sure I am not suggesting a radical change, or indeed any suggested activity at all-just a discussion."patter of late bull runs", I like it..
You maybe right and I completely missed getting out in 2007.
The last time I was sure the market was overvalued was late 99 and 2000. Not only were internet stocks at crazy valuation, but so were regular stocks like GE and KO. Just as importantly bonds offered a respectable return TIPs and iBonds were both offering well over 3% real returns. CA Munis were 5% for 10 year bonds and 5.5-6.0% for 30 year. So it was pretty easy for me to say lets sell tech stocks and buy bonds, cause bonds provided almost enough income to support a 4% SWR with little risk.
The 1-1.5% yield of short term bond funds doesn't provide enough income for me to live on without dipping into my principal something I'm loath to do in my 50s.
Now I know you aren't suggesting making a radical change.
I also have been lightened up. I made my first short sale (NFLX) yesterday in many years and my IRA has a 10-15% in cash secured puts,which will probably expire worthless. Still it would be much easier to sell stocks if there was a reasonable alternative.
I think "holding through the downturn" is quite risky, for a retired person who depends on his portfolio, although I do understand the point that you are making.
Holding through the downturn implies there the downturn is of a length that it can be held through. But imagine we were in Japan holding stocks in 1989. If we held, we would still be well underwater, and we may never recover, even if we were able to live that long.
I actually would more likely do 80% equities and 20% fixed when it looked positive, and 20/80 the other times.
IMO this is all bull talk. (Not BS, but the patter of late bull runs) Maybe correct, but I have seen it many times before- last time 2007.
Ha
To quote a railroad "baron" from back at the turn of the 20th century: "Fortunes have been made by selling too soon"..........
I'm not sure I agree, totally. Even William Bernstein, in Intelligent Asset Allocator (sorry, I don't have the book here, so please feel free to correct), in 1999, looked at the level of the market in predicting future returns, and could see the market offered lousy return probabilities over the next decade.Fear and greed fool us into thinking we can outsmart Mr. Market when all studies show just the opposite. The time to create your investment philosophy is before either a bear or a bull market, not during it. After you creating it, you stick to it. Regardless. History shows doing anything else will be your undoing.
Fear and greed fool us into thinking we can outsmart Mr. Market when all studies show just the opposite. The time to create your investment philosophy is before either a bear or a bull market, not during it. After you creating it, you stick to it. Regardless. History shows doing anything else will be your undoing.
I'm not sure I agree, totally. Even William Bernstein, in Intelligent Asset Allocator (sorry, I don't have the book here, so please feel free to correct), in 1999, looked at the level of the market in predicting future returns, and could see the market offered lousy return probabilities over the next decade.
I do agree that adjusting your investment philosophy during a bull or bear market, becoming more conservative after it has gone down, or more aggressive after going up, what studies show most people do, is death to your returns.
I think this discussion is trying to point out is that we are in one of those overvalued times. If you think the market is always properly valued, I don't think you've been paying attention the last 15 years.
This entire discussion sounds like market timing to me. If you're a retiree and you've done your homework, you shouldn't have a problem with a downturn. Any downturn.