You may, of course, be entirely right, entirely wrong, or somewhere in-between about US stocks. Valuations are at record highs and, if the economy slips, we know what happens to 20+ PE stocks dependent on continued earnings growth. We could see a "correction" in the 30% range even without a serious recession.
That said, I will say that I've been hearing this for four or five years now. I stay invested because it is impossible to time the market consistently. Analysts who look at this kind of thing report that a broad basket of stocks bought in 1929 BEFORE the collapse would have nevertheless appreciated better, as of 1996, than any other generally-available investment. But if you take out something like 15 days when your money wasn't invested, the total return drops by 50%.
So I've decided the only way to play the market is for ultra-long term capital growth, and just take the big declines without complaint. My sister wouldn't invest in stocks three years ago for the very reason that she expected a collapse, due to the fast run-up, and it has hurt her investment returns (as you can imagine).
That's not to say I don't stay on my toes, and I certainly get into more defensive stocks if I get worried. But the long-term odds favor staying invested, as I have never yet seen anyone predict short-term market movement with consistency.
I saw Sumimoto and Long-Term Credit plan a merger. Any comment? |
