Stock Market at all time highs - amid surging global uncertainty?

[Peter4Paul2016]

"Going back over the records of more than a hundred years of data on the stock markets, you find that the S&P 500 long term P/E average has remained at approximately 15. Yet just this past week, the stock market S&P 500 index touched 26.5. If this sounds suspiciously high, it is."

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The figure represents an over 75 percent greater level than the historical longer term average.

[Brian4Liberty]

The long term average sound about right. But during the bubbles of the past couple of decades, it has been much higher. It reached 120 in 2009.

[devil21]

Markets can't goose much higher without concrete action. I've been wrong many times before on crash timing, so take it fwiw, but I do know that numerology is very important to TPTB and 21k looks like a highly possible reversal point. 21=7+7+7. 777 is the number of godly perfection, aka the top.

[Zippyjuan]

"Going back over the records of more than a hundred years of data on the stock markets, you find that the S&P 500 long term P/E average has remained at approximately 15. Yet just this past week, the stock market S&P 500 index touched 26.5. If this sounds suspiciously high, it is."

Read More

The figure represents an over 75 percent greater level than the historical longer term average.

[oyarde]

Looks too high to me . There are many , many I would never buy at that level .

[Zippyjuan]

Looks too high to me . There are many , many I would never buy at that level .

Market timing is impossible. People have said just that and seen it fall shortly afterwards. And they have also seen it continue to rise for a long time afterwards. One strategy is "dollar cost averaging"- investing a fixed amount of money at regular intervals. You get fewer shares when prices are up and more shares when they are lower.

[oyarde]

Market timing is impossible. People have said just that and seen it fall shortly afterwards. And they have also seen it continue to rise for a long time afterwards. One strategy is "dollar cost averaging"- investing a fixed amount of money at regular intervals. You get fewer shares when prices are up and more shares when they are lower.

I have no idea if some of them will continue to rise . I assume they will until the next crash . I just see it as over paying for a not so great product . When it is this high I would be very selective about purchases and choose them for myself and avoid dumping more into any funds . With the exception of an employer matched 401k , in that case , take the free money .

[otherone]

It's getting near that time again...

[Krugminator2]

Market timing is impossible. People have said just that and seen it fall shortly afterwards. And they have also seen it continue to rise for a long time afterwards. One strategy is "dollar cost averaging"- investing a fixed amount of money at regular intervals. You get fewer shares when prices are up and more shares when they are lower.

That isn't completely true. Blair Hull (of losing to Barack Obama for Senate fame as well as being a legit Market Wizard) takes a pretty academic approach to things and put a stock market timing model into that public domain that seems robust. https://www.google.com/webhp?sourcei...timing+model&*

There are a lot of short term market timing strategies that will give you roughly the same return as the market while staying in cash most of the time. If you have money outside of a retirement plan using 1.5x leverage would give you a better return with lower volatility than the market. There are a lot of relative strength and trend following strategies that won't work in an employer retirement plan but backtest better than the market.

[Zippyjuan]

That isn't completely true. Blair Hull (of losing to Barack Obama for Senate fame as well as being a legit Market Wizard) takes a pretty academic approach to things and put a stock market timing model into that public domain that seems robust. https://www.google.com/webhp?sourcei...timing+model&*

There are a lot of short term market timing strategies that will give you roughly the same return as the market while staying in cash most of the time. If you have money outside of a retirement plan using 1.5x leverage would give you a better return with lower volatility than the market. There are a lot of relative strength and trend following strategies that won't work in an employer retirement plan but backtest better than the market.

Moving in and out of the market costs money for each transaction (besides any gains taxes)which reduces your gains. If his strategy matches the overall market, you are better staying in and waiting out dips if you can. Adding leverage increases your risk of losses as well as gains- it multiplies, not reduces, volatility. Buy and hold nearly always beats active trading.

One of the lowest ways to invest is an index fund. These follow a particular index (like the S&P 500 for example but are also available for any index you may want to). Since they track the index, they buy and hold the underlying stocks which again keeps your costs (and tax liabilities) lower.

[Krugminator2]

Moving in and out of the market costs money for each transaction (besides any gains taxes)which reduces your gains. If his strategy matches the overall market, you are better staying in and waiting out dips if you can. Adding leverage increases your risk of losses as well as gains- it multiplies, not reduces, volatility. Buy and hold nearly always beats active trading.

One of the lowest ways to invest is an index fund. These follow a particular index (like the S&P 500 for example but are also available for any index you may want to). Since they track the index, they buy and hold the underlying stocks which again keeps your costs (and tax liabilities) lower.

I wasn't really disagreeing as much as I was bringing up the counterpoint to the ability to time markets. I think people should be in index ETFs. Though I think people don't take enough risk (including myself) and should use leverage.

The advice about staying out of the market is really bad. If anything, a market at all time highs is bullish knowing no other variable.

[Dr.No.]

Personally, I find that in normal times (when the market is doing well), index funds/"passive funds"/mutual funds are very good strategies. Picking and choosing will generally not be a winning strategy in the relative sense.

But in hectic times (dot com crash, housing bubble, etc), picking-and-choosing stocks is the superior strategy. The market as a whole gets incredibly fearful and wrong-headed; index funds or mutual funds buy into that same sentiment.

[Zippyjuan]

Personally, I find that in normal times (when the market is doing well), index funds/"passive funds"/mutual funds are very good strategies. Picking and choosing will generally not be a winning strategy in the relative sense.

But in hectic times (dot com crash, housing bubble, etc), picking-and-choosing stocks is the superior strategy. The market as a whole gets incredibly fearful and wrong-headed; index funds or mutual funds buy into that same sentiment.

Index funds don't worry about sentiment. They buy and hold the same stocks no matter what (unless an index changes what stocks it contains- then the index fund has to re-adjust. ) In hectic times, you cannot be certain which stocks will do better and which will do worse.

[oyarde]

If I were buying stocks now I would concentrate on companies producing goods that will still sell in a downturn . Auto parts ,tires , basic foods , electricity , nat gas things of that nature and I would be very selective .