This year feels exactly the same as 21 years ago, but people are saying it's different because of Covid, Fed buys, etc.
Then again, "this time it's different!" is the rallying cry at the peak of every bubble.
The problem is that while, say, stocks are frothy, eventually inflation catches up to the froth - so even when the crash happens, you end up better off than if you sat the frothy market out on the sidelines.
It doesn't help to be right in the direction of the market, when you're wrong in the timing of it.
In the end, I'm probably better off having held and continuing to buy every couple of weeks throughout than trying to time the market swings from COVID.
I did this.
> I am confident that I wouldn't have had the guts to buy back in after the crash and would have missed out on the rebound gains.
I did this too.
> In the end, I'm probably better off having held and continuing to buy every couple of weeks throughout than trying to time the market swings from COVID.
I wish I'd done this.
The amount of times we've heard "bubble" over past few years, even while/if true, in of itself keeps people from taking it seriously.
Diversify and put most of your money into boring industries like water and energy companies that aren’t stuck on a single type of fuel, and you’ll be alright.
People who shoot for the moon are playing the lottery and most of them are going to lose. It’s always been like that, and I don’t think that’s different now.
I’m much more worried about the inequality we’ve created. I’m a boring investor, and the worst stock I have from 2000 is Vestas, and it’s up around 900% since then. This isn’t take me to the moon money like the gamblers who get it right earn, but it’s 900% more than all the people who live pay check to pay check.
The S&P 50 has closed within 5% of its all-time high 32% of days for its entirety. 1 out of every 15 days the market closes at an all time high. And the vast, vast majority of those don't end up being the precipice of a crash. In fact, even the ones that do predate a crash almost always end up being perfectly fine times to invest for long-term growth.
The null hypothesis really should be that most markets aren't bubbles. So, a "why is this time it different" argument should be required from people calling it a bubble, not from those saying it's not.
During the recession we were told that the days of 10%+ YoY returns in the market were over and that we could expect to live in a world with 3%–5% from here on out. The market meanwhile has gone up fivefold in the interceding 12 years, or roughly a 15% annual return.
All along the way have been the doomsayers insisting that the market will crash, that it feels like 2000 all over again, that Trump, or COVID, or Biden will destroy the stock market, that being at all-time-highs, having an unprecedented CAPE ratio, or quantitative easing is going to send things tumbling… and yet here we are. Sure, the crash will come at some point, but given the thousands of failed predictions I’ve seen in the past twenty years I have zero faith in anyone’s individual ability to correctly guess when it will happen.
Taxi drivers want to talk about stocks. Every graph is looking parabolic. Day trading has boomed. Last time these things happened was 1999-2000.
You'll still lose money, compared to just buying and holding.
Also another great thing to try is get SPX/USD on 500:1 leverage so on a good day when S&P goes up 2% with the leverage multiplier can significantly increase return.
A market correction wouldn't be that surprising in general, but keep in mind a bubble and a correction aren't the same thing. Plus, and maybe more importantly, even know a correction could occur without knowing when isn't actually actionable information (could be tomorrow, next year, or three years from now, and you would lose money if you react at the wrong time).
So people saying we're in a bubble/correction is due, what action would you have people take? If the answer is "nothing" or "I don't know" then what good is that?
People can obviously do whatever they want as long as they're aware past performance...blah...blah...don't invest more than you can lose...blah.
I've pulled out from everything with a rich P/E ratio and am only keeping money in companies that I feel are a) stable and b) have a reasonable-to-low P/E ratio.
My thought is that new investors tend to go for well-known companies or meme stocks, but either way driving up the P/E ratio. I don't want to be caught in the downswing when these investors leave.
It is different!
Trillions of dollars magically printed by the Fed. Bitcoin, Doge Coin, Robinhood, Covid, GameStop, Trump, insurrection...
Fiat currency always ends the same, it's the duration of the fiat currency that I believe is the variable.