[jimjamuser]

Originally Posted by CoachKandSportsguy

just because the fed has been in easy monetary mode with liquidity pushing P/E's higher for many years, doesn't mean that without the fed support, the p/e won't regress to the mean. don't be an Irving Fisher.

One of the problems in today's markets is passive investing, which is very large percentage of the population in 401K plans. The problem is that the purchases are price/outlook insensitive, just buy the index' stocks and you will match the market performance. As the higher the percentage of passive investment goes, the lower the active management trading float, and active management now starts to control prices with 1/2 the float. That increases volatility and the passive sit and go along with it, because they just can't sell part of the index.

TOTV are not long term investors, they are short term investors as compared to the employed population. retire at 65 and you have no supplemental income to replace any lost income if the investments go bad. if retirees expenses are greater than their social security plus minimum IRA distributions, due to unforeseen circumstances, they have to take from assets. Not the same with employed people, and with average longevity declining, say 80 years old, that's a 15 year horizon from which you will be drawing down your income source. It would not be smart to assume one can keep the same long term mix as a 30 or 40 year old with income and promotion potential

Past behavior gives clues to investor's fear or greed sentiment. short term movements do have some emotion to it, but I would argue that the amount of monthly 401K contributions which are monthly contributions with no emotion completely overwhelm any short term behavior, as well as the active management for pension plans, etc.

The problem is that the scenario is different each time, but investor behavior doesn't change, did you read the link about how price changes sentiment? As an investor, your sentiment has to be the opposite of price.

The higher the price, the closer to the top.
The lower the price, the closer to the bottom.

Trend following by definition is 100% invested at the top
and 0% invested at the bottom. . but Buy Low and Sell High profitability requires the opposite investment behavior.

good luck

US average longevity IS declining, but that is confusing because the US has large numbers of immigrants with lower life spans. The US also has a large number of drug overdose deaths, which is driving the average lifespan down. Switzerland and the Scandinavian countries have less of those problems.

True that average longevity would have a big effect on stock buying habits.