[RoadToad]

Originally Posted by FloridaGuy66

You can move your investments to money market funds which is essentially the same as moving to cash but you're getting a whopping 0.4% return.

Do you mean 4% vs .4 ?

[rsmurano]

Money market same as cash? Not sure where you get that info but I have millions in a money market making more than 5% and have for years. It did go down a few months ago to 4.9% but came back up, which is still better than any cash savings account.
As for sky high market, I made a large 6-digit gain in earnings the day after the election a week ago with the rest of my money invested in index funds and a couple stocks.
If you got out of the market in 2007/2008 and in 2020, you missed some of the best comebacks. The 2007/2008 collapse took longer to recover but in 2020, we all knew it was going to a ‘v’ shape recovery and I doubled my money by staying in.
Today, I look at the world economy, and our current political and economic environment before looking at stock market tea leaves to get a feel about the market. I sold everything at its highest point in late 2021 and moved everything to money markets earning 5.x% because of our policies and incoming inflation. In 2023 I started getting back in slowly and by December 2023, I had the majority of my money in index funds and a few stocks. This has been a banner 12 months. As for charts/reports on the market, what did the tea leaves tell you about Apple, meta, nvidia, tesla 1.5 years ago? I got into these over 1.5 years ago when meta and tesla were < $100 a share, Apple in the $120’s, and I can’t remember what nvidia was before the split. I sold some of these a couple months ago with nice profits to get back into more stable index funds making 30+%.
People’s feelings today are exactly what happened in 2016. Back then, A lot of people were scared and sold, others like me, bought more or stayed fully invested.
When people get scared about market evaluations, that’s when you make money in the market. The only issues I see now are: we should not be lowering rates because we aren’t done with inflation, consumers have the largest credit debt in history and defaults usually follow, the wars, and investors making too much hype out of AI, the same way they did about .com in the early 2000’s and we know what happened then.
I have no problem hitting the sell button and moving everything back into money market if any of these issues get worse.

[CoachKandSportsguy]

Sell Hubris, Buy Humiliation
Sell High, Buy Lower

BIL is 3-6 month TBILLS, which are currently over 5% before Cap gains, which is what money market buys for their returns. . .

What's a normal market? Less mega cap dominance of the weighted price indexes, less correlation of component movements. Less passive investment, which increases component correlation which increases volatility on two fronts, and less dependence upon money supply / liquidity growth and more on investment growth.

from a recent Chinese dinner
GFTU



Good Fortune to You

[Desiderata]

Originally Posted by CoachKandSportsguy

Yes, the current SP500 P/E of Forward earnings is approx 22, which has been a ceiling for most rallies.
The Equity Risk Premium (ERP) has just gone negative versus the 10 year yield, which means that the stock market earnings' growth is less that the 10 year interest grate, and equity is supposed to be riskier than the 10 year treasury.
This is due to the sudden rise in interest rates against very little adjustment in the future earnings or in the index price.

Volatility (VIX) index, is low again, which is a sign of lack of expectation of a sell off
The sentiment bullish index of AAII bulls + II Bulls + MarketVane Bulls + NAAIM percent invested is in the 90 percent range of historically scaled results. . .the highest 90%+ was in July, and currently we are in the 80%s, with the decline mostly in AAII, not in the other three professional sentiment rankings. . still very high or greed phase.

So one valuation indicator and two sentiment indicators are all in the GREED / PERFECTION range, and momentum has yet to change. .

So currently I am all in BIL as of Monday until the market corrects and gives a buying opportunity.

YMMV

What does BIL and YMMV stand for? Thanks.

[CoachKandSportsguy]

Originally Posted by Desiderata

What does BIL and YMMV stand for? Thanks.

BIL is a market ETF which buys and holds Treasury Bills of 3 to 6 month diuration

YMMV stands for Your Mileage May Vary, which references the difference between theory and reality. . . because everyone situation is unique

[ithos]

Originally Posted by dewilson58

Market Timing Experts???

Ever heard of Michael Burry?
Who Is Michael Burry?

[RoboVil]

Originally Posted by manaboutown

The Shiller CAPE has hit 38.18, more than double its mean (17.17) and median (16). That seems like a very scary high to me so I have for the most part moved to defensive holdings and the largest proportion of cash I have ever maintained

Shiller PE Ratio - Multpl

The Buffett Indicator is over 200%. So, I am very cautious and would only invest in individual stocks which might not fall as much in a big selloff. Dell and GOOG at the moment seem reasonably valued and less likely to fall horribly if there is a crash. On the other hand, there is a lot of cash tied up in money market accounts which will help the market as interest rates go down. Be safe out there.

[Janie123]

Originally Posted by Rainger99

Doesn’t moving to all cash incur huge capital gains taxes? Is there a way to avoid them?

Not if you are talking about IRAs and 401k’s but yes if regular investment accounts. Another reason I use to continue to move IRAs to Roths… no RMDs moved to an investment account so I would be able to move in and out of cash with no tax penalty. Currently my investment account is my cash world… mostly CDs and somewhat protected structured notes..

[midiwiz]

Originally Posted by manaboutown

The Shiller CAPE has hit 38.18, more than double its mean (17.17) and median (16). That seems like a very scary high to me so I have for the most part moved to defensive holdings and the largest proportion of cash I have ever maintained

Shiller PE Ratio - Multpl

has not effected my portfolio at all. but I don't play the way y'all do. S&P is the least of my concerns. I use very specific investments in my portfolio.

[Rich42]

Ever since the stock market started, corrections (or drops if you prefer) have always been followed by even higher increases. How do you think the market got to where it is today? Make sure your portfolio consists of a good allocation of all types of investments and then stay the course. That is the best investment advice you’ll ever get.

[gatorbill1]

Originally Posted by Rainger99

Doesn’t moving to all cash incur huge capital gains taxes? Is there a way to avoid them?

Majority of my cash is in IRA's balance is in over 5% CDs

[retiredguy123]

Originally Posted by FloridaGuy66

You can move your investments to money market funds which is essentially the same as moving to cash but you're getting a whopping 0.4% return.

When you move non-IRA stock funds to a money market, you will owe capital gains taxes.

[jimhoward]

I wish I were as smart as many here. I can never figure out when to sell everything, and more importantly, when to buy everything back. So I just stay in mostly equities even though I’m always nervous.

I’m also impressed by the high money market returns achieved. I’ve been getting around 5% for the past couple of years. But before that it was much lower.

I have found some nice fixed instruments over the past few years, but the highest yielding ones have short duration or are callable. So those nice returns aren’t really locked in.

[retiredguy123]

Originally Posted by jimhoward

I wish I were as smart as many here. I can never figure out when to sell everything, and more importantly, when to buy everything back. So I just stay in mostly equities even though I’m always nervous.

I’m also impressed by the high money market returns achieved. I’ve been getting around 5% for the past couple of years. But before that it was much lower.

I have found some nice fixed instruments over the past few years, but the highest yielding ones have short duration or are callable. So those nice returns aren’t really locked in.

The idea is to buy low and sell high. But, some people, who consider themselves smart, do just the opposite.

[manaboutown]

I don't claim to be a market timer. What happened is I sold some real estate in 2022 and 2023 and have needed to make decisions about how to invest the money. I remain mostly invested in real estate but now have more money in the stock market than ever before. At the age of 82 with 83 looming on the horizon I prefer to stay on the cautious side. Like most of the world I follow what Buffett does and he has been selling some stocks that look fine to me and holding the proceeds rather than reinvesting them in other equities. I will not delve into speculating why he is selling but AAPL had become an overwhelming portion of BRK's portfolio and the potential for higher corporate tax rates had reared its ugly head.