"But right now the market is at an all-time high ..."

[shuffler]

I hear people saying, "But right now the market is at an all-time high ..." as a reason for not buying stocks, and instead choosing to hold cash or pre-pay low-rate mortgages, etc.

But is an all-time high really that unusual?

I'm a bit of a noob at stock/trend analysis, so I'm sure many people here can do this better than I have done, but I chose the DJIA and data from 1950 to today, and I found that ...

    42% of the time, the DJIA was within  5% of its all-time high.
    62% of the time, the DJIA was within 10% of its all-time high.
    75% of the time, the DJIA was within 15% of its all-time high.

To me, it seems like the market (or at least the DJIA) is near an all-time high most of the time.  Within 15% is "near" in my reckoning.

On average, the daily closing price was at 90.4% of the up-to-that-day all-time high.

So if it's undesirable to invest when a person feels that the market is near an all-time high, then investing on an average day would be preferred, but it's only going to find the market to be 9.6% cheaper.  And to me, that doesn't seem like a good deal.  I'm likely to make that much from the market in a year (or 1.5 years) by investing my stash and not holding it back.

Opinions?
From people who are holding cash?  Are you waiting for a better-than-average (i.e. less than 90% of all-time-high) day to invest?

What else should I have considered in my meager analysis?

[milesdividendmd]

Good analysis.  The market being at an "all time high" is entirely irrelevant.

Being at a high level of valuation (eg CAPE Shiller index at 27), however, is concerning in regards to expected 10 year returns gong forward.  But hiding your money under the couch is probably not a winning strategy as you pointed out.

[frugledoc]

People that say this often have very little money invested in equities.

They will not buy when the market is up as they think it is going to crash and they won't buy when the market is down as they think it will crash.

[warfreak2]

My age is at an all-time high. I assume it'll start going down any moment.

[i_am_the_slime]

They will not buy when the market is up as they think it is going to crash and they won't buy when the market is down as they think it will crash.

This.  Another "stat" that I like is something to the effect of:  90% of the annual gains in the stock market are from 10-15 days out of the year.  So if you miss the few +2% days or the +7% week, you might miss most of the year's gain. 

[jstash]

Good analysis.  The market being at an "all time high" is entirely irrelevant.

Being at a high level of valuation (eg CAPE Shiller index at 27), however, is concerning in regards to expected 10 year returns gong forward.  But hiding your money under the couch is probably not a winning strategy as you pointed out.

Except (from Investopedia):
"An article in the September 2011 issue of the American Association of Individual Investors’ Journal" noted that the CAPE ratio for the S&P 500 was 23.35 in July 2011. Comparing this ratio to the long-term CAPE average of 16.41 would suggest that the index was more than 40% overvalued at that point. The article suggested that the CAPE ratio provided an overly bearish view of the market, since conventional valuation measures like the P/E showed the S&P 500 trading at a multiple of 16.17 (based on reported earnings) or 14.84 (based on operating earnings). Although the S&P 500 did plunge 16% during a one-month span from mid-July to mid-August 2011, the index subsequently rose more than 35% from July 2011 to new highs by November 2013."

[milesdividendmd]

Good points jstache. 

I'm aware of the limitations of the CAPE shiller index.

It's an imperfect tool.

But the fact remains that valuations do matter.

I fact in this paper from vanguard, historically 43% of future market returns were found to have been attributable to CAPE Shiller valuations after multivariate regression analysis.

https://personal.vanguard.com/pdf/s338.pdf

I'm pretty sure that the market being "near an all time high" would have had no such predictive effect.

[clarkfan1979]

Based on my knowledge of Psychology, the availability heuristic is currently at play. Everyone still remembers the last crash. The cue for the last crash is an all time high. If the DOW is currently at 17K I would predict that it will hit 20K before it hits 14K. Just my opinion. If you look at the historical trends of the stock market, my prediction is not that bullish.

[peterpatch]

I don't think it's possible to time the market, I wouldn't worry about the price being at an all time high either. It's sort of a meaningless headline that all the business news outlets run to get your attention.

Speaking of the possibility of a bubble and the Shiller valuation I was reading a very thought provoking article about this here. Basically it argues that the P/E  ratio (and variants like shiller P/E) is flawed as a bubble predictor because it is taken out of context.

Essentially the author points out that the market is pricing a significant premium to the risk free rate of return (Federal Bonds) for investing in stocks right now. Interest rates are really low so even a seemingly high p/e ratio is warranted given the opportunity cost in fixed incomes securities.

[shuffler]

Thanks for all the comments.  Seems like "at an all-time high" is thoroughly debunked, at least among respondents here.

[matchewed]

Thanks for all the comments.  Seems like "at an all-time high" is thoroughly debunked, at least among respondents here.

Just meaningless as an upward trend will always be at an all time high at any particular randomly chosen point.

[PatrickJ]

Good analysis, but am I correct that it doesn't account for inflation?

After selling some investments and a bond being called I'm 50% in cash involuntarily. The stock markets fairly rich valuation make me reluctant to sink a huge amount in at these prices but it's possible I am making a mistake.

[shuffler]

Good analysis, but am I correct that it doesn't account for inflation?

Correct, I didn't do anything with inflation.

[ampersand]

This hits home for me; I just received a decent bonus on top of finally locking down my emergency fund. My tax advantaged accounts are funded... So if I invest now it will be after tax at less than ideal market evaluations. I'm not one to time the market, (I don't sell once I buy) but I sure wouldn't mind a correction.


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[ampersand]

Hmmm I don't know for certain. I have no debt other than a 2.5% mortgage. My current thought is to put it into a vanguard s&p 500. If the market drops by 20% I tax harvest the loss and reinvest in a triple long S&P ETF.  Thoughts?


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[ampersand]

I locked myself into a 15 yr mortgage at exactly the right time last year. Luck more than skill. And while I payed to much for the house, I did get a garage apartment that I rent. :)

Yeah, I think investment is still the right route. The other reason I want to to play it safe is having FU money with my current manager. Company's great, but its nice knowing I can walk out.

[Mr Mark]

Sounds like you should check out bigger pockets.

There is a third way. Between bonds and stocks real estate can be impressive.  Low fixed rates are exactly what people predict will go away when this correction happens, right?

and rental real estate is inherently inflation proofed. And tax advantaged.

[ampersand]

Bigger pockets?

I'm a fan of real estate overall. With the equity in my house, my asset allocations is about 20% to real estate. I'm concerned about the illuquidity though. I moved to this city for a job. I'm not certain how long I'll be here. If I knew I'd reside here for 10 years, I'd think about a rent house, but because I'm young and single, I hesitate to lock myself even further down than my current mortgage. At anything but the current stock market evaluations, I'd serously think about refinancing a paid off house for stock market money.

Most people on this site I'm sure shuddered at the idea of using home equity money to play the stock market, but it makes sense to me. I just don't have the equity/ low stock values to do it right now. It is one of the reasons I'd be willing to gamble on leveraged S&P 500 ETF's though.

I agree with you that rental real estate is a great hedge on inflation. Though I don't follow you though that its tax advantaged. Can you elaborate?

[surfhb]

Bigger pockets?

I'm a fan of real estate overall. With the equity in my house, my asset allocations is about 20% to real estate. I'm concerned about the illuquidity though. I moved to this city for a job. I'm not certain how long I'll be here. If I knew I'd reside here for 10 years, I'd think about a rent house, but because I'm young and single, I hesitate to lock myself even further down than my current mortgage. At anything but the current stock market evaluations, I'd serously think about refinancing a paid off house for stock market money.

Most people on this site I'm sure shuddered at the idea of using home equity money to play the stock market, but it makes sense to me. I just don't have the equity/ low stock values to do it right now. It is one of the reasons I'd be willing to gamble on leveraged S&P 500 ETF's though.

I agree with you that rental real estate is a great hedge on inflation. Though I don't follow you though that its tax advantaged. Can you elaborate?

Don't gamble with your finacial future ;).   The reason why people shudder at the thought of using your residence as capital to fund investments in stock is because it's not smart

[DaKini]

Why it's not smart exactly?
I thought it is a reasonable thing as long as your income can potentailly sustain the full payments of the mortgage?

The question to solve is the one of risk capability. I for example are relatively young have a quite stable government-like job so job loss is a really small risk (yes also in down markets). This means as long as my income is able to handle the mortgage, i could invest it, i can probably wait out most bear markets.
If only i had real estate, i would consider doing this and run the numbers. At 2.5% interest rate dividends would cover a good part of the payments. I would invest the money according to my overall asset allocation so i would not incur more risk besides that of leverage.
The only thing i would not do would be to apply more leverage as i can handle, meaning i would not take out more mortgage i could safely cover with my income (without taking the income of the leverage in consideration, that woudl be extra).
That should be quite safe i think. What am i overlooking?

[warfreak2]

Why it's not smart exactly?
I thought it is a reasonable thing as long as your income can potentailly sustain the full payments of the mortgage?

When the stock market crashes, lots of people lose their jobs.

[matchewed]

Also is your HELOC at a fixed rate? Or variable? If variable then changing interest rates could damage your easy scenario.

Also if the market crashes or a dividend is cut and that impacts your ability to pay back the HELOC and you get closer and closer to that draw period, what are you going to do? Sell at a loss to scramble to pay it back?

Look if your income can keep up with a HELOC and a mortgage payment why not just keep investing that money? You'll have to make gains greater than the interest rate on the HELOC.

There are several risks to HELOCs. They are not a safe way to play the stock market. You invest in the stock market money you can afford to have in a short term volatile situation for the understanding of long term gains.

[Cheddar Stacker]

My age is at an all-time high. I assume it'll start going down any moment.

Ha! Love it.

[nereo]

My age is at an all-time high. I assume it'll start going down any moment.

Ha! Love it.

yeah - same thing about my weight.  It's bound for a correction, right?

[matchewed]

My age is at an all-time high. I assume it'll start going down any moment.

Ha! Love it.

yeah - same thing about my weight.  It's bound for a correction, right?

Reversion to the mean baby!

Which could mean two different things now that I think of it depending on if I choose to use a comma. I'll go with no this time.

A)

[nereo]

Reversion to the mean baby!

Which could mean two different things now that I think of it depending on if I choose to use a comma. I'll go with no this time.

A)

Ha!  Reminds me of my very cranky (teething) 1.5 year old niece.  Even when she was happy, you knew that soon there was going to be a "reversion to mean baby".  I just never thought about it quite like that.

[ampersand]

First of all, I think its important to note that I am a little bit different case. I'm young, single and do not have a lot of risk aversion. I have a decent chunk of cash as a reserve. I'll freely admit that I don't know the rules of HELOC's. That being said. Taking loans against your house to play the stock market is not necessarily a "horrible, no good very bad thing". I've attached a spreadsheet to illustrate my point. I based it off of purchasing a 150k house either outright or via low rate mortgage. You can play with the numbers as you see fit.

I should note I made the assumption of using "current dollars" and ignoring inflation. While this is "simplistic", inflation would actually be less detrimental to the aggressive portfolio than the conservative one" so I feel that its justified to make my point. (I used 6% S&P return after inflation)

Here are a few results. If you were to buy a house at 3.5% and basically keep 100k out to put in the stark market you would come out over 150k ahead in 30 years. That's big money. Even if the market dropped 20% the day after you put all your money into the S&P500, you would still come out 30k over someone who paid strait cash for their house.

To the comment about losing employment while suffering a major crash. I currently have a garage apartment that pays a decent junk of the rent. And certainly enough to cover these scenarios if I had to downsize/lose my paycheck. Worse case scenario; i could rent out both the house and the apartment and hike the AT/PCT/CDT or go back and hide in grad school.

The point I'd like people to see is that leveraging  is not an unreasonable move. Just because some people see it as "too risky" does not mean its "stupid". It all depends on the case/scenario and individual risk tolerance. I'd be comfortable making these choices if the market dropped 20%.

[Rob]

Hmmm I don't know for certain. I have no debt other than a 2.5% mortgage. My current thought is to put it into a vanguard s&p 500. If the market drops by 20% I tax harvest the loss and reinvest in a triple long S&P ETF.  Thoughts?


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Can you explain (or link) what a triple long ETF is? This isn't a term I've heard before.

Thanks

[ampersand]

A leveraged ETF designed to return a multiple value of an underlying index/commodity. For example UPRO is a triple long Based on the S&P 500. If the S&P goes up 1% UPRO goes up 3%. In reality they don't quite make their goal, and have high fees but still exaggerate the performance. There are 2x and 3x varieties. Long funds go up when the index goes up. Short/bear funds are on an inverse. If you were positive that gold was going to drop a lot you might buy a triple short and try and make a ton of money. Unlike actually shorting a stock you can ensure losses doesn't exceed your initial investment since your share price just drops to zero. These funds also allow you to leverage retirement accounts where otherwise you can't short or use margin. Do you hear alarm bells yet? In the last 5 years UPRO went from 12.5 to 118 while still being a diversified product, but get caught holding it during the tech bubble and it's ruinous.
I'm willing to throw small amounts of after tax money into something like this, but not key holdings.


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[bigchrisb]

First of all, I think its important to note that I am a little bit different case. I'm young, single and do not have a lot of risk aversion. I have a decent chunk of cash as a reserve. I'll freely admit that I don't know the rules of HELOC's. That being said. Taking loans against your house to play the stock market is not necessarily a "horrible, no good very bad thing". I've attached a spreadsheet to illustrate my point. I based it off of purchasing a 150k house either outright or via low rate mortgage. You can play with the numbers as you see fit.

I should note I made the assumption of using "current dollars" and ignoring inflation. While this is "simplistic", inflation would actually be less detrimental to the aggressive portfolio than the conservative one" so I feel that its justified to make my point. (I used 6% S&P return after inflation)

Here are a few results. If you were to buy a house at 3.5% and basically keep 100k out to put in the stark market you would come out over 150k ahead in 30 years. That's big money. Even if the market dropped 20% the day after you put all your money into the S&P500, you would still come out 30k over someone who paid strait cash for their house.

To the comment about losing employment while suffering a major crash. I currently have a garage apartment that pays a decent junk of the rent. And certainly enough to cover these scenarios if I had to downsize/lose my paycheck. Worse case scenario; i could rent out both the house and the apartment and hike the AT/PCT/CDT or go back and hide in grad school.

The point I'd like people to see is that leveraging  is not an unreasonable move. Just because some people see it as "too risky" does not mean its "stupid". It all depends on the case/scenario and individual risk tolerance. I'd be comfortable making these choices if the market dropped 20%.

I've used a lot of leverage in the past.  Mostly margin loans, but also using 0% balance transfers to invest in stocks.  I don't disagree with your analysis.  But I do offer the following psychological observations based upon my own experience.

- With leverage, you are needing to prop-up your portfolio when there is genuine panic.  I spent time at the nadir of the GFC fending off margin calls and keeping afloat, when I believed stocks were a screaming buy.  It was  huge frustration not having any available cash (or access to debt) to invest at that point.

- Despite trying to be rational about it (and thinking of myself as a highly rational being), I struggled to maintain the same views on leverage at the low points.  It means I was more comfortable with higher debt when times were good, and less comfortable when times were bad. 

- As my portfolio has grown, I've become less tolerant of high leverage, as I'm less willing to wipe out and start again.

From my experience, you don't really know how you are going to react in times of crisis.  It may not be as rational as you like to think you are (it certainly wasn't for me).

That said, I still prepared to use leverage in stocks, and wouldn't hesitate to gear back up should real panic hit.  But I'd be looking at more conservative gearing rations now (20-30%) rather than the 60-75% I was using before.

[milesdividendmd]

First of all, I think its important to note that I am a little bit different case. I'm young, single and do not have a lot of risk aversion. I have a decent chunk of cash as a reserve. I'll freely admit that I don't know the rules of HELOC's. That being said. Taking loans against your house to play the stock market is not necessarily a "horrible, no good very bad thing". I've attached a spreadsheet to illustrate my point. I based it off of purchasing a 150k house either outright or via low rate mortgage. You can play with the numbers as you see fit.

I should note I made the assumption of using "current dollars" and ignoring inflation. While this is "simplistic", inflation would actually be less detrimental to the aggressive portfolio than the conservative one" so I feel that its justified to make my point. (I used 6% S&P return after inflation)

Here are a few results. If you were to buy a house at 3.5% and basically keep 100k out to put in the stark market you would come out over 150k ahead in 30 years. That's big money. Even if the market dropped 20% the day after you put all your money into the S&P500, you would still come out 30k over someone who paid strait cash for their house.

To the comment about losing employment while suffering a major crash. I currently have a garage apartment that pays a decent junk of the rent. And certainly enough to cover these scenarios if I had to downsize/lose my paycheck. Worse case scenario; i could rent out both the house and the apartment and hike the AT/PCT/CDT or go back and hide in grad school.

The point I'd like people to see is that leveraging  is not an unreasonable move. Just because some people see it as "too risky" does not mean its "stupid". It all depends on the case/scenario and individual risk tolerance. I'd be comfortable making these choices if the market dropped 20%.

I've used a lot of leverage in the past.  Mostly margin loans, but also using 0% balance transfers to invest in stocks.  I don't disagree with your analysis.  But I do offer the following psychological observations based upon my own experience.

- With leverage, you are needing to prop-up your portfolio when there is genuine panic.  I spent time at the nadir of the GFC fending off margin calls and keeping afloat, when I believed stocks were a screaming buy.  It was  huge frustration not having any available cash (or access to debt) to invest at that point.

- Despite trying to be rational about it (and thinking of myself as a highly rational being), I struggled to maintain the same views on leverage at the low points.  It means I was more comfortable with higher debt when times were good, and less comfortable when times were bad. 

- As my portfolio has grown, I've become less tolerant of high leverage, as I'm less willing to wipe out and start again.

From my experience, you don't really know how you are going to react in times of crisis.  It may not be as rational as you like to think you are (it certainly wasn't for me).

That said, I still prepared to use leverage in stocks, and wouldn't hesitate to gear back up should real panic hit.  But I'd be looking at more conservative gearing rations now (20-30%) rather than the 60-75% I was using before.

This comment is really interesting. 

I've never really seen the point of leverage, but your response makes me understand it a bit better.  I also enjoyed your honest take on the perils of overestimating your risk tolerance. 

Perhaps it could be said that rebalancing is advantageous.  Strategic asset allocation (IE increasing stock allocations at times of low equity valuations) is rebalancing on steroids, and strategic asset allocation with leverage is strategic asset allocation on steroids.

I also enjoyed your point about leverage being hard to come buy when it is the best bet, (ie during liquidity crises/market panics.)

[KBecks2]

I was worried that the market was at an all time high about a year ago, when I started to get back into individual stock investing.  The market has continued to rise.

I listen to lots of people and one of them is Jim Cramer, who has been saying that we are in a bull market and he doesn't see an end in the near future.

When I was in my late 20's I invested somewhat carelessly. Think 1999 tech bubble.  Time will let you recover, but it's better not to have to learn the hard way. 

Anyway, I am long in stocks but also hold 20-30% cash to invest in case we get some sale prices.  I am also learning about hedging through the investment service I subscribe to (Motley Fool Pro), but I have not bought a hedge yet, I am preferring to hold the cash as an alternative.

There will be a correction, no doubt about it.  You should be mentally prepared to see your balances down by 30% - 40%.  But we don't know when.  I used to be "buy and hold" but now I am more "buy and really pay attention to it".  I also love the phrase -- take what the market gives you -- and I want to learn how to find and make opportunities in any market.  I am learning about and using options strategies to help with that.

Have fun! You have many years of savings and learning.  No rush, keep learning, seek out advice of people smarter than you and learn, practice, learn, practice some more.  Keep saving! 

[Rob]

A leveraged ETF designed to return a multiple value of an underlying index/commodity. For example UPRO is a triple long Based on the S&P 500. If the S&P goes up 1% UPRO goes up 3%. In reality they don't quite make their goal, and have high fees but still exaggerate the performance. There are 2x and 3x varieties. Long funds go up when the index goes up. Short/bear funds are on an inverse. If you were positive that gold was going to drop a lot you might buy a triple short and try and make a ton of money. Unlike actually shorting a stock you can ensure losses doesn't exceed your initial investment since your share price just drops to zero. These funds also allow you to leverage retirement accounts where otherwise you can't short or use margin. Do you hear alarm bells yet? In the last 5 years UPRO went from 12.5 to 118 while still being a diversified product, but get caught holding it during the tech bubble and it's ruinous.
I'm willing to throw small amounts of after tax money into something like this, but not key holdings.

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Thanks. If I'm understanding it correctly, why would any long term investor not do this? As a 24 year old with a 40 year time frame, why would I invest in the SP500 when I could essentially get 3x the return?

[bigchrisb]

Thanks. If I'm understanding it correctly, why would any long term investor not do this? As a 24 year old with a 40 year time frame, why would I invest in the SP500 when I could essentially get 3x the return?

Because when the market falls 1/3rd from its last high (as it happens to from time to time), your long term investment becomes zero and liquidated. You then start from zero allover again, and probably miss the gains that followed the large losses.

[dragoncar]

Thanks. If I'm understanding it correctly, why would any long term investor not do this? As a 24 year old with a 40 year time frame, why would I invest in the SP500 when I could essentially get 3x the return?

Because when the market falls 1/3rd from its last high (as it happens to from time to time), your long term investment becomes zero and liquidated. You then start from zero allover again, and probably miss the gains that followed the large losses.

Not really... are you thinking about margin leverage or am I missing something?  Look at the chart for SSO, for example (I don't know of a 3x that existed in 2008).  It's regained it's highs since 2007.  The real reason is decay/contango/backwardation.  Also counterparty risk.  These lower the return/risk profile vs a 1x fund, although it could still fit in your portfolio.

[RapmasterD]

<<I listen to lots of people and one of them is Jim Cramer, who has been saying that we are in a bull market and he doesn't see an end in the near future.>>

I wonder what time frame or time period Cramer is looking at. Because when I look at and manipulate the chart on this Wikipedia page (http://en.wikipedia.org/wiki/S%26P_500#Total_annual_returns), looking at 10 and 20 year chunks and returns in particular (10 year return for 70-79, 80-89, 90-99, etc.) to me it looks like we're in a short term bull market within a much longer term bear market.

Nobody can predict the future and I'd never change my investment plan based on whether I THINK the market is at an all time high. But I have to wonder if we'll see a period for stocks as completely crappy as 2000 - 2009 was...in the next 40 or so years. In other words I'm quite optimistic for those with longer holding periods.

[Scandium]

Hmmm I don't know for certain. I have no debt other than a 2.5% mortgage. My current thought is to put it into a vanguard s&p 500. If the market drops by 20% I tax harvest the loss and reinvest in a triple long S&P ETF.  Thoughts?


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Well, international/emerging markets have had less of a run up, so maybe increase your investment to those? Of course that doesn't mean the future returns will be better. (so don't come to me if you do this and the S&P goes up 30% and BRIC crash..)

[soccerluvof4]

The thing that i keep wondering is if and when the market "adjusts or crashes" what will cause it and how bad will it be? Obviously we dont know the answer which is why too i stick with my plan. It just seems every person I talk to says the next time the market falls they have learned and are going all in (whatever that means to each person).  Perhaps this could be a reason the market has held and edges up. I dont know , but what i do know is I know from people in my circles there all waiting and feel there is alot of cash sitting on the sidelines yet. 

[milesdividendmd]

I was worried that the market was at an all time high about a year ago, when I started to get back into individual stock investing.  The market has continued to rise.

I listen to lots of people and one of them is Jim Cramer, who has been saying that we are in a bull market and he doesn't see an end in the near future.

When I was in my late 20's I invested somewhat carelessly. Think 1999 tech bubble.  Time will let you recover, but it's better not to have to learn the hard way. 

Anyway, I am long in stocks but also hold 20-30% cash to invest in case we get some sale prices.  I am also learning about hedging through the investment service I subscribe to (Motley Fool Pro), but I have not bought a hedge yet, I am preferring to hold the cash as an alternative.

There will be a correction, no doubt about it.  You should be mentally prepared to see your balances down by 30% - 40%.  But we don't know when.  I used to be "buy and hold" but now I am more "buy and really pay attention to it".  I also love the phrase -- take what the market gives you -- and I want to learn how to find and make opportunities in any market.  I am learning about and using options strategies to help with that.

Have fun! You have many years of savings and learning.  No rush, keep learning, seek out advice of people smarter than you and learn, practice, learn, practice some more.  Keep saving!

Cramer is entertaining enough. But his track record for predicting things is not great.

According to this article he is only right 46.8% of the time!

http://www.cxoadvisory.com/gurus/

The smart money is in keeping it simple which, for me at least, is a constant struggle.

[Richard3]

My age is at an all-time high. I assume it'll start going down any moment.

Are you a woman? Because it just might, one of my friends is now the same age as me despite being seven years older than me when we first met ;)

[DoctorOctagon]

90% of people are going to be in this boat in the next decade (estimated returns might be conservative based upon DJIA 1900-2014):

(1) Refuse to buy because stocks are "gonna crash"
***Dow increases from 17,000 to 25,000 ~~2016***
(2) Refuse to buy because stocks are "DEFINITELY gonna crash"
***Dow increases from 25,000 to 50,000 ~~2018***
(3) Refuse to buy because gosh darn, NOW STOCKS WILL CRASH!!!!!
***Dow increases from 50,000 to 120,000 ~~2021***
(4) Capitulate and buy stocks.
***DOW CRASHES 40%***
(5) Panic and sell stocks.  Curse the stock market as a "bad investment"