Predictions on when the market correction happens

[OldPhiKap]

Remember that your allocation (ie equities vs fixed income) may be very different now from your target as equities have soared. So, while your target last year might have been 60/40, unless you have reallocated you might now be at 70/30. If that’s ok with you then alright...but worth that assessment.

I actually crystallized significant unrealized gains earlier this year, but then reinvested albeit in a different, more balanced, strategy.

The old allocation rule of thumb (for what little generic advice is worth) was that your stock holding % should be 110 minus your age. As you get older, less risk and more bonds/CDs. Not sure if that is still used, or has been modified.

We have had an incredible run. I don’t see much harm in locking in some profits. You may miss some upside, but you may protect against a big bubble burst too. But I’m closer to the end of my working career than the beginning.

[Dr. Rosenrosen]

I won’t link it here b/c it’s NSFW... but Wu-Tang gives sound financial advice. Google it.

[acdevil]

You got to diversify your bonds, @&#%!

[ricks68]

Does anyone have a decent capital preservation strategy that includes bonds with a decent return?

Texas municipal 30 yr bonds paying 4% and will rise as the Fed increases the rate.

ricks

[budwom]

People who claim to know when the correction is going to happen (if it happens) can't be believed...but we are certainly at a key point now
where fourth quarter earnings will be reported...and much of the stock market's rise has a baked in assumption that earnings will continue to grow (aided by the tax law change).

IF (emphasis) earnings widely disappoint, it would a perfect time for something of a correction, but I don't have the slightest idea if earnings will be disappointing or not.

[fuse]

Here is one person’s perspective on a date.
I’m not knowledgeable enough to comprehend if this is a legit concern, or FUD.

https://pro.manwardpress.com/p/EVENT...WLU105/?h=true

[RPS]

Here is one person’s perspective on a date.
I’m not knowledgeable enough to comprehend if this is a legit concern, or FUD.

https://pro.manwardpress.com/p/EVENT...WLU105/?h=true

The previous date was December 13. Or December 15, 2016. I'm sure there were others, mostly scrubbed.

[Jeffrey]

Don't try to time the market.

[YmoBeThere]

Don't try to time the market.

But it is going to happen today!!!

Or tomorrow...or some other day.

Eventually, right?

[PackMan97]

But it is going to happen today!!!

Or tomorrow...or some other day.

Eventually, right?

I predict that it will happen on a day that ends in Y.

[Jeffrey]

But it is going to happen today!!!

Or tomorrow...or some other day.

Eventually, right?

Hopefully, many times before my death!

[OldPhiKap]

Interesting opinion piece in the WSJ today by Marin Feldstein. Thesis: Fed is behind in raising interest rates, and with inflation looming will start moving them up. This will drive stock P/E back to historic ranges and drive the price down.

[Rich]

Interesting opinion piece in the WSJ today by Martin Feldstein. Thesis: Fed is behind in raising interest rates, and with inflation looming will start moving them up. This will drive stock P/E back to historic ranges and drive the price down.

He went my high school (many years before I did). My Social Studies teacher, Mr. Geiss, used to tell us how wonderful Marty was. True story.

[OldPhiKap]

He went my high school (many years before I did). My Social Studies teacher, Mr. Geiss, used to tell us how wonderful Marty was. True story.

When the teachers at my high school talked about former students, it was usually to lament that they knew the kid would end up in jail one day.

Did Mr. Geiss say how Marty was at predicting future events from extrapolated facts? Asking, y’know, for a friend and all.


(That’s pretty cool, Rich.)

[RPS]

Did Mr. Geiss say how Marty was at predicting future events from extrapolated facts? Asking, y’know, for a friend and all.

Bill Bernstein did: "There are two kinds of investors. There are two kinds of investors, be they large or small: those who don't know where the market is headed, and those who don't know that they don't know."

[OldPhiKap]

Bill Bernstein did: "There are two kinds of investors. There are two kinds of investors, be they large or small: those who don't know where the market is headed, and those who don't know that they don't know."

True. But wouldn't it seem logical to assess:

1. The Fed is going to be raising interest rates after a very easy money policy for close to a decade now and the decreased concerns about deflation that wafted every so often a few years ago?

2. Rising interest rates increase the attractiveness of an increased amount of investing dollars going towards bonds as opposed to equities?

3. Rising interest rates increase the cost of capital, having a dampering effect on corporate earnings and value?

4. Rising interest rates tend to adversely impact small and mid-cap stocks more than large, and certain industries over others?

5. Many overseas markets such as Europe have already done the majority of their tightening for the foreseeable future, and therefore certain foreign stocks may be better-priced?

I'm not saying that any of that calls for a crash. I question whether that means that the current P/E priced into the U.S. market is likely to sustain. It has nothing to do with timing the market, it has to do with asset allocation and whether my investment allocation for new dollars may be better served overseas or in the industries/sectors/cap sizes that are less interest-rate dependent.

I dunno. That's why I read and why I enjoy threads like this. Kudos to all for their input.

[Jeffrey]

When the teachers at my high school talked about former students, it was usually to lament that they knew the kid would end up in jail one day.

Was it because I had long hair, wore Grateful Dead t-shirts, slept in class, and was always bored?

[Jeffrey]

Interesting opinion piece in the WSJ today by Marin Feldstein. Thesis: Fed is behind in raising interest rates, and with inflation looming will start moving them up. This will drive stock P/E back to historic ranges and drive the price down.

I have not read the article, but it's probably simply based upon the probability the discount rate, in discounted cash flow analysis, will increase (maybe, substantially). I'd wager the discount rate is heading north within the next 12 months.

[Jeffrey]

Many overseas markets such as Europe have already done the majority of their tightening for the foreseeable future, and therefore certain foreign stocks may be better-priced?

Why do you say that? Isn't the current US 10 year rate substantially higher?

[Rich]

Did Mr. Geiss say how Marty was at predicting future events from extrapolated facts? Asking, y’know, for a friend and all.

Reminds me of the old joke I heard as an Economics major:

A ‪‎physicist‬, an ‪‎engineer‬ and an ‪‎economist‬ are stranded in the desert. They are hungry and find a can of corn. They want to open it, but how?
The physicist says: “Let’s start a fire and place the can inside the flames. It will explode and then we will all be able to eat”.
“Are you crazy?” says the engineer. “All the corn will burn and scatter, and we’ll have nothing. We should use a metal wire, attach it to a base, push it and crack the can open.”
“Both of you are wrong!” states the economist. “Where the hell do we find a metal wire in the desert?! The solution is simple: Assume we have a can opener…”