Anyone else preparing for a big selloff?
 

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

I moved to all cash and some short term bond funds recently. Scary right now and next year. I can't afford a big loss but I can live with very small gains.

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

I make you right.
Were I still playing the market, I would definitely have taken my profit, and run to to the hills.
All bubbles burst eventually.

if you want to get historical SP500 earnings from SP for the last 30 years, click on the link below

https://www.spglobal.com/spdji/en/do...0-eps-est.xlsx

Clicking should autodownload an excel workbook, with the SP500 earnings, and other great data, plus the current earnings forecast for the next 4+ quarters. .

good luck to us

Not a trader. Made my portfolio adjustments in July with my financial adviser. Remain diversified. It’s been a good year.

If you want to read an analysis on what investments work well under different inflation assumptions, here is a great web page to research

Varying by Degrees: Fire & Ice 2.0 | Man Institute | Man Group

Thought so in the dot com era, the mortgage crisis years and 2020C(covid). What goes up must come down

But sometimes the down part is mild and most people miss the bottom and should have stayed the course.

My crystal ball smashed a few years ago. Here is hoping winter green fees will go down if the market crashes?

Market Timing Experts???


:posting:

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

not in an IRA. .

but you mean capital gains as a tax on success? I will gladly make millions and pay the appropriate capital gains versus losing money and waiting to return to a gain or taking a loss

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.

[QUOTE=manaboutown;2386402]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[I


I did the same this week.