The author doesn’t mention that his article is the latest in a long line of “bubble’s about to pop” articles that have been steadily written since around 2014. Sure the stock market is in a bubble. But I would be sad if I had spent the last 8 years waiting for it to pop.
I was lucky during the financial crisis to have cash that I could put in a term deposit for 5 years at 7%, my first-ever term deposit, To my detriment, I took out half after a couple of years to create an online game that failed.
However, when the rest matured, I was lucky to triple that money by investing in a couple of speculative ventures. Having used up my allotted measure of luck, I now look for solid investments.
I have recently liquidated about half my shares. I am waiting for the bubble to burst. I have my eye on a couple of solid companies whose share price may fall dramatically as people need the cash. I am approaching seventy and I need a solid portfolio that I can slowly sell down to meet living expenses.
My rules:
1) Avoid bitcoin, it seems so much like the "Souk Market": https://www.livewiremarkets.com/wires/the-greatest-bubble-yo...
2) Avoid meme and NFT stocks; they seem like the new tulip craze.
3) Avoid unethical stocks; they remind me of the South Sea Company: https://www.britannica.com/event/South-Sea-Bubble
4) Avoid hugely inflated P/E ratios; remember pets.com.
In short, look for ethical* companies with strong fundamentals.
*However, I am not sure that ethical and profitable can co-exist. So my rule is to choose a company that has a product or service that I use and like, or a CEO/founder whom I admire. I try to research companies. But I find that other people's advice is rather limited, as they tend to know less about the companies than I do. In the end, you have to trust your own judgement.
When I researched ethical funds it looked like the best (and almost only) organization giving these signals is Triodos[0] but it is not available in all countries.
How could we solve this issue?
For most businesses it should be possible to be profitable and ethical at the same time, profit will not be as high as it could be but that’s ok for me and I’m sure there investors who agree (maybe not a lot).
2.5 years ago I put it on hold, because with such high prices the bubble must burst.
1.5 year ago I put it on hold, because with COVID and high prices the bubble must burst.
6 months ago I finally bought an apartment. I paid 30% more than I would have in 2019, but 10-15% less than I would have to pay today.
I hear you. But later in the article he does advocate, or at least approve of, dollar cost averaging into a low cost mutual fund.
I think he has in mind as an audience his college students. I have some students who with great enthusiasm have told me how much they are using to invest in things that are, let's say, a place where historically very savvy people have lost a great deal of money. It is all so easy, they assure me.