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Hmm. Well, I’m trying to figure out my tax / investing strategy for the year. I’m assuming there will be inflation, (potentially lots of it), and energy prices will go up (see Keystone pipeline discussion). Beyond that, I have no clue. The tech companies may have interfered their way into oblivion, but at the same time, they are quasi-monopolies, and their success left them in control of all the levers of any government oversight structures. Companies catering to small business (Shopify, to some extent Salesforce, etc.) may not have any clients left. Pharma has not performed that well, even those companies involved in producing vaccines haven’t done that well.
With the understanding that I assume very few of the posters here are financial advisors, I’m curious what people’s thoughts on the economy are.
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The Shiller PE index is at the second highest level EVER. The only other time it was higher was the dot com bubble in 2000. It is even higher than in 1929.
It means the market is overextended, and will eventually have a severe correction or worse. However, overbought markets have a way of staying overbought for extended periods of time.
Also, biden might implement a string of horrible policies. Or maybe I should say his handlers. If so, the market will see that ahead of actual events and act accordingly.
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Thanks for highlighting the valuation issue. Historical information here:
https://www.multpl.com/shiller-pe
Here's a toast with one last pour, may it last forever and a minute more;
Good fortune seems to you have sung, to live and love way past long
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Right now there is nowhere else to go but the stock market. The party will go on for a year or so. Get in hold on and don’t panic sell when it goes down.
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So you don’t see a 45% correction as in 2008; or a 60% correction as in 2000, or an 80% correction as in 1929?
When might you experience a fitful sleep on the way down?
Here's a toast with one last pour, may it last forever and a minute more;
Good fortune seems to you have sung, to live and love way past long
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Sigh. The Fed’s job is not to prop up the stock market, a complaint I’ve had since Bush II. We have asset bubbles in everything, but at least we don’t (currently) have a bubble in bad debt (that I’m aware of).
I bought some REITs during the pandemic crash in my Roth accounts. I bought some tech as well. But I have little confidence in the current stock market, I just feel like inflation, higher energy costs, and other factors will result in a rebalancing of the economy. At the same time, the international economies aren’t exactly in great shape, and there aren’t that many asset classes that look attractive. Maybe crypto?
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