Market crash imminent? Invest or pile cash?

[ashish_dharam]

Hi

My first time posting. So apologies if I am missing standard protocol in some way.

So some context before the question. I save the prescribed amount each month (50%) and I am well diversified across all investment categories (real estate, cash, ETFs (stocks and bonds) and across various channels (401K, Roth IRAs etc.)

My dilemma (of my own making) is that I am fairly certain that the market will crash in the near future (6-12 month horizon) and as a result, I am unsure if I should continue investing. I believe the valuations are too high and given the current geo political situation, a market cave-in is imminent

On the one hand, I could continue investing and tough it out through a crash (as I don't need the money for a decade). On the other hand, I could just sit on a growing pile of cash (in a money market account) and let it lose value (even though it is safe)

I am leaning towards continued investing but I wanted to know if anyone had any suggestions on this issue? Any thoughts? Anyone in a similar dilemma?

Thanks

[daverobev]

This gets asked a lot. Just keep investing. Yes, the market will drop. Yes, it will recover.

If you can't cope with the drop, reassess your asset allocation.

Stick to the plan. The middle of a crash is not a great time to realise you have too much in stocks.

If your plan is shit, get a new one, but make sure you aren't just knee-jerking. 40% bonds, 60% stocks in low cost funds and you will be fine pretty much no matter what.

[TheHardenedInvestor]

Will the market crash in the future? Inevitable. Figure out an asset allocation that works for you and with your level of risk tolerance and stick with it.

Panic selling and fear is your worst enemy. Also, not investing is not “preparing” for a crash. It’s being a speculator trying to time the market, which has been proven to fail.

With a 10 year time frame a 75/25 portfolio would be fine. I’m 95/5. Probably should increase my bond position slightly, but I’m hardened. Market drops are a gift in my eyes. Some 30+% decline is welcome news for me.

[JLee]

If you were that good at predicting the market, you'd be a billionaire by now.

[MDM]

My dilemma (of my own making) is that I am fairly certain that the market will crash in the near future (6-12 month horizon) and as a result, I am unsure if I should continue investing. I believe the valuations are too high and given the current geo political situation, a market cave-in is imminent

Can you do better than Bob?

[ashish_dharam]

Thanks everyone. I guess I was just looking to reinforce my inclinations and seems like that is the consensus. Thanks again! Loved the article on Bob! That was an eye-opener!

[dragoncar]

check out https://forum.mrmoneymustache.com/investor-alley/top-is-in

[ShoulderThingThatGoesUp]

check out https://forum.mrmoneymustache.com/investor-alley/top-is-in

Dang, you beat me to it. Guess that means the top is in.