I think its hard to look at asset classes over long periods of time. I think real estate and stocks have done well last 7 years due to all the money floating around. If you put your money in the S&P in Sept of 1996 and took out in 2009, you would have made absolutely zero, not taking dividends into account. 13 years the index was flat.
I think going forward, maybe next 10 years, stocks will return high single digits maybe.
Ignoring dividends, but also inflation. So, yes...more or less flat.
30B withdrawn from equity funds last week lol.
it it is hard being a contrarian and have discipline in the market. 2 factors for succeed. Not easy
Contrarian against the consensus that bid shares up? Against the consensus that sold them off?
I don't particularly try to be a contrarian. I just try to make money! The consensus can be very wrong at times...or very right.
Good points. Personally I don’t like following the herd....often wrong on the longer term. People will go mad trying to speculate on recent short term movements. Up 500 today down 1000 tomorrow ? Who knows
I was like.......here's what happened during the Dow's worst single-day point fall ever. It was the scariest day on Wall Street in years. Stocks went into free fall on Monday, and the Dow plunged almost 1,600 points -- easily the biggest point decline in history during a trading day I had ever seen.
I wish you all much prosperity... slow and low while patient wins the race agreed. I must practice this...
I've sold some ETFs I had linked to USA, European, and Japanese indexes. I missed their recent highs, but still realized some reasonable gains. More importantly, I now have a healthy 20% cash position.
If you look at indicators like market value to GDP and the Schiller CAPE ratio , stocks are greatly over valued by 30 % or so. In the 50s and 60s when economic grow was 4 to 5 percent and dividend yields were 4 %, you could expect maybe 9 percent a year
now ? Stocks yield 1.5 maybe 2 % and gdp growth maybe 3% so you are looking 5% or so in equities. Stocks were dead money for 25 years after 1929, 16 years after 1966 and a decade or so after tech bubble in 2000. Some large caps like microsoft and coke were dead money for what 15 years
I don’t know. In a market like this with stocks expensive , bonds in a bubble and rates going up I would rather take profits early and wait for better value. Let other people squeeze out last dollars of profit at top.
A month ago, 100b went into equity funds. Most in history for month. A good contrarian indicator
You have to compare to the alternatives. Stocks are not overvalued when 10 year treasuries were 2 percent. If you do inverse p/e a stock trading at 20 p/e is a 5 percent return. Much better than 2 percent return on a 10 year bond. I think the problem is Treasury rates should go up with all the cutting revenue and increasing spending our government is doing. The problem of keeping large sums in cash is that if inflation really takes hold it will be a steep decrease in the value of your cash.
I just bought some some European ETFs. They seem undervalued. Less likely to have inflation with the Euro and Swiss Francs. Made a ton of money off of retail stocks recently. Which I have sold most of what i had.
If there is a real big correction people who hold things like Amazon and Netflix could see a 90 percent loss. Tesla owners could see all their money disappear. Facebook seems overvalued. Lot of places to lose big. Everything I buy is below 20 p/e and have low debt. High return on capital. Well I did buy Volkswagen when it was at the bottom. Even though they have a lot of debt and low return on capital when they are basically giving the biggest car company in the world away for nothing you have to buy.
I am not sure why anyone would be scared when equity prices are going down unless it was in 2008 when we had the global financial crisis. Stock prices going down for no reason is a good thing if you are an investor. Dividend yields go up when stocks go down. It is great news. If you are short term investor you shouldn't be in stocks anyway.
If you find a great company at a good price and you buy it and the stock goes down 10 percent buy more. If it goes down another 10 percent buy more again.