S&P500 at record highs - time to stay in or pull out?
Discussion
The S&P has spent over 30% of its life at or near an all time high.
If you sell now, when do you get back in?
What if it is never as low again as it is today?
It would be advisable to have actionable answers to these questions if you are going to make a play. Otherwise it would be gambling based on hunches, and that doesn't usually end well.
My play is leave it in the market, especially as interest rates start to drop. The wealthy will be looking to move out of high interest savings accounts into other assets which potentially yield greater returns, like stocks.
Just my 2 cents, and most likely wrong
If you sell now, when do you get back in?
What if it is never as low again as it is today?
It would be advisable to have actionable answers to these questions if you are going to make a play. Otherwise it would be gambling based on hunches, and that doesn't usually end well.
My play is leave it in the market, especially as interest rates start to drop. The wealthy will be looking to move out of high interest savings accounts into other assets which potentially yield greater returns, like stocks.
Just my 2 cents, and most likely wrong
gerlewis said:
The S&P has spent over 30% of its life at or near an all time high.
If you sell now, when do you get back in?
What if it is never as low again as it is today?
It would be advisable to have actionable answers to these questions if you are going to make a play. Otherwise it would be gambling based on hunches, and that doesn't usually end well.
My play is leave it in the market, especially as interest rates start to drop. The wealthy will be looking to move out of high interest savings accounts into other assets which potentially yield greater returns, like stocks.
Just my 2 cents, and most likely wrong
Good point on the 30% at or near highs.If you sell now, when do you get back in?
What if it is never as low again as it is today?
It would be advisable to have actionable answers to these questions if you are going to make a play. Otherwise it would be gambling based on hunches, and that doesn't usually end well.
My play is leave it in the market, especially as interest rates start to drop. The wealthy will be looking to move out of high interest savings accounts into other assets which potentially yield greater returns, like stocks.
Just my 2 cents, and most likely wrong
If I sold now I would probably wait out the current geo political situations, and see what happens by Q3 2024 in the general economy (with focus on US), see the earnings results during the year and then see how it goes. I get your point though - if a crash isn't forthcoming then when do I go back in? maybe have a strategy that if the market rises another 10% I would go back in - that confirms the sell low buy high strategy mentioned above and won't help! But it all depends on what happens, could be a good play, could be a bad play, it's a risk either way.
I have thought about when interest rates drop, investors would generally favor other investments outside of risk free rate if the rate plummets, but do we expect <1% interest rates as a go forward position? Are those days numbered? If medium to long term 3% is what we expect, then cash/bonds are still attractive for a portion of a sophisticated (or institutional) investors portfolio, short and long term.
Things just aren't making much sense at the moment, with higher interest rates and instability the equity market shouldn't be at all time highs? We should be in a bear market and we aren't - this is what's driving part of my thoughts!
I'm leaning towards maybe hedging a taking a proportion out to cash, could even invest in a completely different kind of fund (property?). Gold also at all time high is another thing to consider, do we see that breaching 2.5k oz should things go to pot?
S1MMA,
As expected the general consensus was always going to be stay in and invested. PH is predominantly a car forum after all!
That slightly ignores the question you originally asked?
It does make you wonder if everyone is so convinced the S&P is a one way street to positive returns, why they are not invested to their maximum exposure or borrowing from their mortgage to see a repeat of the 24% gains seen in 2023?
As expected the general consensus was always going to be stay in and invested. PH is predominantly a car forum after all!
That slightly ignores the question you originally asked?
It does make you wonder if everyone is so convinced the S&P is a one way street to positive returns, why they are not invested to their maximum exposure or borrowing from their mortgage to see a repeat of the 24% gains seen in 2023?
S1MMA said:
Interesting timing indeed!
Time in the market rather than timing the market, I'm all for that long term. Just my short term radar is picking up some enemy bogey activity possibly coming our way.
Some interesting facts there on friday - thanks for that. Very interesting point on the SPW - I've had a look at that now, thanks. I will have a look at Q4 1987.....
So on your last points, are you saying you have made any moves since oct? or just stayed in?
That is interesting given that I’m putting this year’s ISA into an equal weighted S & P 500 as, like most people is suspect, I am heavily skewed towards the US mega tech stocks through my other investments.Time in the market rather than timing the market, I'm all for that long term. Just my short term radar is picking up some enemy bogey activity possibly coming our way.
Some interesting facts there on friday - thanks for that. Very interesting point on the SPW - I've had a look at that now, thanks. I will have a look at Q4 1987.....
So on your last points, are you saying you have made any moves since oct? or just stayed in?
Time will tell whether or not this is a good idea!
Been following this guy for a while. His outlook is not good.
https://www.tramlinetraders.com/the-french-are-rev...
https://www.tramlinetraders.com/the-french-are-rev...
skilly1 said:
Been following this guy for a while. His outlook is not good.
https://www.tramlinetraders.com/the-french-are-rev...
Ha,,,,I thought it might be an Elliot Wave view! https://www.tramlinetraders.com/the-french-are-rev...
EW is certainly a consideration and has it's place once other factors start to kick in?
The problem with technical analysis (which I am competent at and respect) is other factors seem to carry more weight, as in the Magnificent 6 of the SPX (Tesla fell out!) appear to be profitable.
EW is useful as an accelerant when and if markets start to turn.
S1MMA said:
All very true, and I have never predicted a peak or bottom! I think if I sold at 4900, and the market dropped below 4000 I would be comfortable buying back in between 3500-4000, then go back to holding long terms and continue with the standard pension plan contributions I have.
The flipside is that if you sold at 4,900 and the index rose, at what level would you buy back in? 5,200? 5,500? 6,000? My best guess is that you’d find it very mental challenging to back in at a number above what you sold at.clubsport said:
S1MMA,
As expected the general consensus was always going to be stay in and invested. PH is predominantly a car forum after all!
That slightly ignores the question you originally asked?
It does make you wonder if everyone is so convinced the S&P is a one way street to positive returns, why they are not invested to their maximum exposure or borrowing from their mortgage to see a repeat of the 24% gains seen in 2023?
Well the consensus isn’t that it’s a one-way street. The consensus is that on the balance of probabilities it’s more likely to go up, and the longer you’re invested the more likely that is. That doesn’t mean the market never goes down. And if it goes down you won’t want to be over levered on a mortgage.As expected the general consensus was always going to be stay in and invested. PH is predominantly a car forum after all!
That slightly ignores the question you originally asked?
It does make you wonder if everyone is so convinced the S&P is a one way street to positive returns, why they are not invested to their maximum exposure or borrowing from their mortgage to see a repeat of the 24% gains seen in 2023?
skilly1 said:
If you had a lot of cash receiving 5%, less tax, would you move it now into S&P 500 or similar. Or would you spilt it 50:50?
im 66% stocks 33% savings.but then i need some cash for a big planned purchase otherwise i might be more in stocks.
Cash will be less appealing if rates drop though. by which time dividend paying stocks will have risen.
S1MMA said:
"Wall Street is currently anticipating double-digit S&P 500 earnings growth in 2024 and 2025, and the market could experience a significant correction if companies fall short of those expectations."
How much of this is dependent on who becomes the next President? One will be a businessman (unless the opposition finally jail him for wearing odd socks), the other one won't be.You’ve got a Ferrari F40 that you paid £1m for apparently but you don’t have any money elsewhere to capitalise on a big dip if that should happen? Right.
My personal take is that it’s pointless, especially as you’re probably in your mid 30’s and if the cars in your profile are real you’re likely doing something right elsewhere that should take precedence over trying to become a trader. You hear of the people that try and flog their house and rent and then buy back in for less - it almost never works out for a multitude of reasons (mostly in the mind I’m sure).
I haven’t been quite as bold as you in that I tend to be a bit more diversified than just NAMER but I shan’t be worrying about anything for at least a decade (same age as you I expect). And as b
hstewie says, as times goes on there is significant modulation available to de-risk/diversify rather than go extreme and move to full cash.
My personal take is that it’s pointless, especially as you’re probably in your mid 30’s and if the cars in your profile are real you’re likely doing something right elsewhere that should take precedence over trying to become a trader. You hear of the people that try and flog their house and rent and then buy back in for less - it almost never works out for a multitude of reasons (mostly in the mind I’m sure).
I haven’t been quite as bold as you in that I tend to be a bit more diversified than just NAMER but I shan’t be worrying about anything for at least a decade (same age as you I expect). And as b
hstewie says, as times goes on there is significant modulation available to de-risk/diversify rather than go extreme and move to full cash. Good thread.
OP you seem to be alluding to some sort of imminent Black Swan event. As you say, no one can predict the future. By definition these events are rare and unpredictable. We know they happen (dotcom crash, GFC, Covid in recent memory) and will again, we just don't know exactly when.
Surely to invest in equities you have to believe that in the long term, markets will continue to rise? Of course even this is not always true (see Japan!) but if you don't accept that small risk then equities aren't really where you should be. I would add that you can also mitigate that risk through diversification (e.g. global rather than specifically US markets)
OP you seem to be alluding to some sort of imminent Black Swan event. As you say, no one can predict the future. By definition these events are rare and unpredictable. We know they happen (dotcom crash, GFC, Covid in recent memory) and will again, we just don't know exactly when.
Surely to invest in equities you have to believe that in the long term, markets will continue to rise? Of course even this is not always true (see Japan!) but if you don't accept that small risk then equities aren't really where you should be. I would add that you can also mitigate that risk through diversification (e.g. global rather than specifically US markets)
I wonder whatever happened to Derek, I am sure he would have posted these two links.
https://ofdollarsanddata.com/should-you-invest-in-...
https://awealthofcommonsense.com/2024/01/new-all-t...
https://ofdollarsanddata.com/should-you-invest-in-...
https://awealthofcommonsense.com/2024/01/new-all-t...
okgo said:
You’ve got a Ferrari F40 that you paid £1m for apparently but you don’t have any money elsewhere to capitalise on a big dip if that should happen? Right.
My personal take is that it’s pointless, especially as you’re probably in your mid 30’s and if the cars in your profile are real you’re likely doing something right elsewhere that should take precedence over trying to become a trader. You hear of the people that try and flog their house and rent and then buy back in for less - it almost never works out for a multitude of reasons (mostly in the mind I’m sure).
I haven’t been quite as bold as you in that I tend to be a bit more diversified than just NAMER but I shan’t be worrying about anything for at least a decade (same age as you I expect). And as bhstewie says, as times goes on there is significant modulation available to de-risk/diversify rather than go extreme and move to full cash.
Jesus i just looked. if true why is the OP needing advice from us.My personal take is that it’s pointless, especially as you’re probably in your mid 30’s and if the cars in your profile are real you’re likely doing something right elsewhere that should take precedence over trying to become a trader. You hear of the people that try and flog their house and rent and then buy back in for less - it almost never works out for a multitude of reasons (mostly in the mind I’m sure).
I haven’t been quite as bold as you in that I tend to be a bit more diversified than just NAMER but I shan’t be worrying about anything for at least a decade (same age as you I expect). And as b
hstewie says, as times goes on there is significant modulation available to de-risk/diversify rather than go extreme and move to full cash. S1MMA said:
....
Again, I'm not asking anyone to predict the future. Maybe share what you are doing, and what your thoughts are on the current market? Could be a strategy is to hold a proportion in cash, and a proportion in a fund or funds, what are you doing and do you have any good mitigation strategies?
The main point (that you already know) is that no one has a clue what is going to happen to the S&P500.Again, I'm not asking anyone to predict the future. Maybe share what you are doing, and what your thoughts are on the current market? Could be a strategy is to hold a proportion in cash, and a proportion in a fund or funds, what are you doing and do you have any good mitigation strategies?
Personally, I've moved some of my investments over to options trading. That offers 'insurance' to the banks etc against the downside risks, which most people are afraid of, and it can also gain pretty well if the market moves up higher than expected. It's also not beta correlated, which is important to me, and might be to you, if you are looking to diversify.
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