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As of this morning here is the Shiller Index:

Shiller PE: 33.1 (+ 1.616%)
Shiller PE is 29.3% higher than the recent 20-year average of 25.6
Implied future annual return: 1.4%
Recent 20-year low: 13.3
Recent 20-year high: 38.8
S&P 500: 3635.41
Regular PE: 37.7 (Recent 20-year average: 25.7)

I'm not a market timer and won't attempt to predict how long the current run will last but valuations will come back to Earth in time. I've got less than 10% of assets in dividend growth mutual funds and the remainder in a money market fund totally invested in FDIC-insured CDs.

I make enough on part-time work, Social Security, and a very small pension to pay all my bills, with no debt. I want my children to inherit what I've been able to accumulate over the past decades. Also praying that at the end of life the Medical Establishment Axis doesn't take it all, as I understand 90% or more of all medical expenses occur during the last two months of one's life.

I spent 20 years in the investment business --- stocks, bonds, mutual funds, commodities/futures, annuities, currencies --- and the best advice I ever received was, "Put your faith in God, not the markets". I'm not the only investor here who has witnessed how quickly markets can collapse, and last Spring was just the latest episode. It happens so fast most people are paralyzed and can't sell because they've been told, "Stay the long-term because the markets always come back". Sure, but it takes years to recover the half of your assets lost in a mere month or two. Remember, we came back from the First Covid Shock because Trump was president; the Second Covid Shock will have Dementia Joe at the helm. With today's current Radical Left worldwide push on the rise the next global collapse may well last decades, now that Big Marxist Media has near-monopoly on information.
 

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Because they'll have to start printing Fake $$$ (backed by nothing) to pay for all the socialist schemes the Left hopes to push through Congress under Biden.

Sure, they'll package each program as 'Free Stuff,' but of course it's never 'free'; it'll be financed by deficit spending and massive tax hikes.
We have been printing fake $ backed by nothing since August 15, 1971.
 

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I keep feeling tempted to pull cash out of the market while it is surging, but then feel that maybe letting it ride as the market soars higher is more prudent. Who knows?
 

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I spent 20 years in the investment business --- stocks, bonds, mutual funds, commodities/futures, annuities, currencies ...I'm not the only investor here who has witnessed how quickly markets can collapse, and last Spring was just the latest episode. It happens so fast most people are paralyzed and can't sell because they've been told, "Stay the long-term because the markets always come back". Sure, but it takes years to recover the half of your assets lost in a mere month or two.
That’s why along with “buy and hold” people are supposed to select an appropriate asset allocation for their risk tolerance and time horizon.
 

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I keep feeling tempted to pull cash out of the market while it is surging, but then feel that maybe letting it ride as the market soars higher is more prudent. Who knows?
Staying the course has made people rich without fail decade after decade.

People who try to time make massive costly mistakes, frequently.

Make sure your funds are diversified, you asset allocation is appropriate to your risk tolerance and time horizon, and stay the course.
 

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How well America is doing is measured by the stock market and the top 2%.

It would be nice if someone would check with the rest of us!
I'm not going to defend Wall Street but some of your points are not totally correct.

There is only a loose relationship between the stock market and the actual economy. In truth, a company's stock is like any other commodity in that they are governed by the very basic laws of supply and demand;.....

When everyone wants to buy, prices will rise.

When no one wants to buy or everyone wants to sell, then prices will drop.

The markets will continue their march upwards as long as there are people who invest via their 401K, etc. That is, as long as there are people who want to buy.

Why does Wall Street do well when there are so many people suffering? Layoffs in bad times are bullish since it shows a willingness to make adjustments that ensure the company's survival (which is a stupid way to look at things because you're caught flat footed when the economy turns if you're missing the people who make things run).

Lastly, the stock market is a predictive indicator which leads the real economy by about six months. If the stock market bottoms out in April, then the real economy will bottom out six months later in October or November. This odd phenomena makes the market look like a worse actor than it really is.

Now, the boneheads associated with the markets - that's a whole different story.

V.
 

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That’s why along with “buy and hold” people are supposed to select an appropriate asset allocation for their risk tolerance and time horizon.
This ^^^

A 32-yr old with a decent job, two kids, a 30-yr mortgage, and a spouse working part-time, is in a radically different position as to asset-allocation and risk-tolerance than is a retired 60-yr old widow/empty-nester with a defined pension income who also had invested well for decades.

The latter now doesn't need the risks associated with a portfolio that's heavily invested in stocks.
 
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Interesting. Can you cite your source on stagflation please?


The trick would be how to define the inflation part of stagflation.

If you use the official gov stats like the CPI or the PCE - or if you believe them - then you would say we don't have much inflation so - if we have no inflation no stagflation is possible.

I predict the official method for calculating inflation statistics will be modified again if they start to show an increase - it is a game.

http://www.shadowstats.com/alternate_data/inflation-charts

These guys calculate inflation using the method from 1980 and 1990 - as if no changes to the method had been made.

Surprise - CPI inflation using 1980 method (eyeballing it) is almost 9% - say 8.75%

CPI using 1990 method is about 5%.

If we still used the same method of calculating inflation as we did in 1980 you could say we have stagflation right now.

It sure feels like the things we (wife and I) buy cost more than they use to -

Our health insurance just went up 9.1% -to almost $18K a year and a $17K deductible. But of course the CPI does not include the cost of heath insurance premiums in their calculation. At least not directly.

We live in interesting times.
 

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Discussion Starter #50
I don't see stagflation. With prevailing rates as low as they are the FRB can put the brakes on the inflation at will by raising rates.

The FRB has now stated they are willing to accept marginally higher inflation for the overall economic good.

That is why I asked the poster to cite his source. I have not seen potential stagflation raised as an issue previously.
 

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That’s why along with “buy and hold” people are supposed to select an appropriate asset allocation for their risk tolerance and time horizon.
As already mentioned, a rising tide carries all boats and a visa versa. What investors are "supposed" to do and what their psychological makeup causes them to do are not one and the same thing. agtman put it succinctly:

A 32-yr old with a decent job, two kids, a 30-yr mortgage, and a spouse working part-time, is in a radically different position as to asset-allocation and risk-tolerance than is a retired 60-yr old widow/empty-nester with a defined pension income who also invested well for decades.
 

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As already mentioned, a rising tide carries all boats and a visa versa. What investors are "supposed" to do and what their psychological makeup causes them to do are not one and the same thing. agtman put it succinctly:
So try and time the market for fear of a Radical Left and Marxist Media fueled decades long global collapse? (I see you say you aren’t a marker timer, but the gist of your post sure seems like that’s what you’re advocating).

And I do believe agtman was agreeing with my sentiment... not yours.
 

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Must be Democrats.
Huh OP?
:)
 

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Truth always sounds like lies to a sinner
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everyone trying to make as much as possible while Trump is still in. when sloppy joe goes in the market will go dowwwn
 

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Why does it have to be political? Why does it matter who takes credit for what? People will spin it any way they can. Just be happy it is on a tear right now. :cheers:
 

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So try and time the market for fear of a Radical Left and Marxist Media fueled decades long global collapse? (I see you say you aren’t a marker timer, but the gist of your post sure seems like that’s what you’re advocating).

And I do believe agtman was agreeing with my sentiment... not yours.
Are you trying to say that certain age groups don't lose money in a market crash at the very same rate as the elderly?

What I'm saying is that if you have a decade or so to wait until your nest egg is back to where it was before the debacle you're still going to have a lot of ground to make up. Turning a blind eye to politics is a recipe for financial disaster. Obama's "new normal" of 1% yearly growth may soon look like a windfall if the crazies take control of Congress and the Executive branches of government in today's climate.

Before the Great Recession's housing collapse investors were flipping housing properties in hours over the Internet, having never visited those properties. Today a half-dozen high tech issues account for the vast majority of the stock market's rise and on top of that we've got a pandemic to deal with. One was a blazing, flashing red light presaging a collapse; the other may very well be the same thing, especially if a Covid lockdown succeeds in collapsing the millions of small businesses across America.

If you're okay with riding the wave that's fine; for myself I'll continue to enjoy my Golden Years with no concern over the day-to-day fluctuations in the markets. But out of curiosity, do you have a "stop" point level for your investments already set or are you telling yourself the markets will always come back? How much of your capital are you willing to lose before you decide to sell? These are questions you need to be asking yourself now, not when a panic is underway. Thankfully, I don't need those worries at this stage in life, but I wish I had been more cognizant of them when I was younger because I'd have a lot more in the bank today.

Preservation of capital is paramount. I may be old fashioned in my outlook but I still recommend The Battle For Investment Survival by Gerald Loeb as a primer for anyone risking financial assets in the markets. It may be an ancient book but sound principles have a way of spanning the decades.
 

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The God I pray to is not short on cash mister.
 
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