A possible (probable?) retirement bubble and an overvalued market is a valid point to bring up, I think.
What are your rational thoughts on these two ideas?
What is a retirement bubble?
The market is overvalued, or was a few weeks ago. And I keep buying. Stocks will perform just fine in the long run. I will buy them when overvalued, because we don't ever know where the top or bottom is.
The touches on a retirement bubble briefly. Then idea is that all the retirement money from the Boomers is inflating a bubble in the market. Is Boomer money solely responsible for a high market valuation. I doubt it. But, they've got a lot of money in the market and as they begin withdrawal and reallocation, how is that going to affect pricing?
I really don't know the definitive answer.
The idea that the market is overvalued is certainly something I'm factoring into my strategy though. At 31 and the beginning of my accumulation phase, I've got plenty of time to wait for a major correction and/or crash to invest into something like a total market index. I'll build up my war chest by sitting on cash, learn more about investing, and look to for other opportunities in the meantime.
I can't help be suspicious at a time when so many are saying "the market always goes up". The same thing was said about tulips and house prices. Sure, they always go up over time, but I'd still rather get a good deal.