The stock market is dirt cheap now

[effigy98]

Buffett said that if these rates were guaranteed to stay low for 10, 15 or 20 years, then “the stock market is dirt cheap now".

“Everything in valuation gets back to interest rates;” “The most important thing is future interest rates;” and “If I could only pick one statistic to ask you about the future before I gave the answer, I would not ask you about GDP growth, I would not ask you about who was going to be president… a million things I wouldn’t [ask]… I would ask you what the interest rate is going to be over the next 20 years on average.”

Interesting. I do not see any hopeful signs that interest rates are going to rise significantly globally. Maybe it's time to leverage more real estate debt and invest.

Edit... Thank you RadRam for the link:
https://finance.yahoo.com/news/warren-buffett-everything-valuation-gets-back-interest-rates-140328844.html

[ysette9]

When did he say this? Can you link to a reference?

I find this interesting in light of all of the "woe is me, the stock market is overpriced!" threads we keep seeing around here.

[ChpBstrd]

When did he say this? Can you link to a reference?

I find this interesting in light of all of the "woe is me, the stock market is overpriced!" threads we keep seeing around here.

That's a pretty big "if".

[nereo]

When did he say this? Can you link to a reference?

I find this interesting in light of all of the "woe is me, the stock market is overpriced!" threads we keep seeing around here.

Only the buyers think it is over priced....the sellers think it is too cheap!  Since most MMM posters are still accumulating..vuala 🎶

how did you make those little music notes?

[talltexan]

When did he say this? Can you link to a reference?

I find this interesting in light of all of the "woe is me, the stock market is overpriced!" threads we keep seeing around here.

Only the buyers think it is over priced....the sellers think it is too cheap!  Since most MMM posters are still accumulating..vuala 🎶

how did you make those little music notes?

The rest of us are trying to figure out how to manage $1million+ asset portfolios, and you're focused on musical note emoji?

Perhaps I've been doing this wrong :-)

[NESailor]

When did he say this? Can you link to a reference?

I find this interesting in light of all of the "woe is me, the stock market is overpriced!" threads we keep seeing around here.

Only the buyers think it is over priced....the sellers think it is too cheap!  Since most MMM posters are still accumulating..vuala 🎶

how did you make those little music notes?

The rest of us are trying to figure out how to manage $1million+ asset portfolios, and you're focused on musical note emoji?

Perhaps I've been doing this wrong :-)

Hasn't this been settled by all the respected authorities on here (JLCollins, MadFientist, MMM...and a host of others)?  Perhaps it IS time to focus on emoji's.  ;)

[nereo]

When did he say this? Can you link to a reference?

I find this interesting in light of all of the "woe is me, the stock market is overpriced!" threads we keep seeing around here.

Only the buyers think it is over priced....the sellers think it is too cheap!  Since most MMM posters are still accumulating..vuala 🎶

how did you make those little music notes?

The rest of us are trying to figure out how to manage $1million+ asset portfolios, and you're focused on musical note emoji?

Perhaps I've been doing this wrong :-)

Yeah man... I've got my AA set, my investments are pretty much on auto-pilot... time to focus on the things that could influence my day to day life.  Like musical note emoji :-)

[radram]

When did he say this? Can you link to a reference?

I find this interesting in light of all of the "woe is me, the stock market is overpriced!" threads we keep seeing around here.

Last week at the BRK annual meeting. One summary here with a nice video clip.

https://finance.yahoo.com/news/warren-buffett-everything-valuation-gets-back-interest-rates-140328844.html

[effigy98]

When did he say this? Can you link to a reference?

I find this interesting in light of all of the "woe is me, the stock market is overpriced!" threads we keep seeing around here.

Yes this is exactly why I thought it was interesting too. I see too much doomsday top is in stuff and it made me nervous. It was nice to have some balance to the debate. I am also reading Tony Robbins new book unshakeable which has a great section on why this fear is irrational vs the hard numbers of markets going up, corrections, and crashes. Spoiler, my fear is very irrational compared to the facts.

[ysette9]

I love the emoji side conversation, btw. Let's see what I can throw in....

🍪🍩🍚🥂🚗🏝🗿☎️💎💰🛀🇫🇷

As long as we are completely off topic, the phone emoji reminds me of the first classified program I worked early in my career. My desk phone for the classified phone network was literally a big, clunky, bright red analog phone like the image above. Like one the old Batman would have used. Hilarious!

[Car Jack]

Some time ago, I searched around to find the average number of days between market highs.  It's 18 days.  I've responded to several people who think they need to wait that if they wait too long, that market high that just passed is going to be made obsolete with a higher new high.  I like the musical notes.

[triangle]

I also heard him say in an interview this past week (maybe it was the same one posted here that I did not check) that he would not recommend buying bonds. Implying that he believes interest rates are going up, implying that the stock market is not dirt cheap. 

But it is anyone's guess as to what the economy and market will actually do over the next few years.

[Tyson]

Stock market is always dirt cheap because it always goes up (on a long enough timeline).

[ChpBstrd]

And Buffet is sitting in how much cash right now?

I think his "IF" statement emphasizes the long odds of interest rates saying at 2% for decades.

[Tyson]

I saw a thread from 3 years ago - the OP was getting into cash because he felt a correction was coming.  But the market just kept going up and up and up.  Dow Jones was at 16,000 then, it's at $20,000 now.  Look at all that money he missed out on, by sitting on cash waiting.  Timing the market is a fools errand. 

[human]

I often wonder what happened to the people that post the sky is falling threads. Did they really go to cash and are they still in cash? When the hell are they going to buy back in? 5 years from now and then smugly post back in the old thread saying I told you so!!??

[Sydneystache]

I often wonder what happened to the people that post the sky is falling threads. Did they really go to cash and are they still in cash? When the hell are they going to buy back in? 5 years from now and then smugly post back in the old thread saying I told you so!!??

This reminds me of the time Concorde got shut down after its fatal crash and the news kept interviewing this woman who was a Concorde skeptic and she said it would never last - not for the reasons she thought but nevertheless she said "I told you so". Yup, several decades later and several thousand flights too...

So yes, there will be people out there sitting on piles of cash and quite smugly happily pointing out everytime there is a market down turn. Now, for those who hoard gold though...

[Linea_Norway]

I often wonder what happened to the people that post the sky is falling threads. Did they really go to cash and are they still in cash? When the hell are they going to buy back in? 5 years from now and then smugly post back in the old thread saying I told you so!!??

On a financial podcast I heard that when the rent of becoming too low, like many percent negative, people will keep cash. This includes building a vault and hiring security guards.

I have been thinking about what to do as a more normal person (who doesn't want to store cash in a vault) when the rent is extremely low and the stock markets are becoming too unpredictable. As long as the property market doesn't crash, investing into property could be a good thing. I noticed that some rich people invest into art, a big of a risky business I think, and it requires proper maintenance of the pieces. Would it be a Mustachian option to invest into second hand articles? Like some nice, expensive loudspeakers or other things that are bought second hand (50% of the new price) and can be resold for practically the same price later. Normally this would end up in zero profit. But if would surely beat a negative rent, I presume?

[ChpBstrd]

I often wonder what happened to the people that post the sky is falling threads. Did they really go to cash and are they still in cash? When the hell are they going to buy back in? 5 years from now and then smugly post back in the old thread saying I told you so!!??

On a financial podcast I heard that when the rent of becoming too low, like many percent negative, people will keep cash. This includes building a vault and hiring security guards.

I have been thinking about what to do as a more normal person (who doesn't want to store cash in a vault) when the rent is extremely low and the stock markets are becoming too unpredictable. As long as the property market doesn't crash, investing into property could be a good thing. I noticed that some rich people invest into art, a big of a risky business I think, and it requires proper maintenance of the pieces. Would it be a Mustachian option to invest into second hand articles? Like some nice, expensive loudspeakers or other things that are bought second hand (50% of the new price) and can be resold for practically the same price later. Normally this would end up in zero profit. But if would surely beat a negative rent, I presume?

The rent for zero risk is always zero. Any time you make a loan or buy equity, you accept risk in return for some expectation of reward. Although inflation has changed, the expected real purchasing power of rent at zero risk has not.

[signhere]

I often wonder what happened to the people that post the sky is falling threads. Did they really go to cash and are they still in cash? When the hell are they going to buy back in? 5 years from now and then smugly post back in the old thread saying I told you so!!??

On a financial podcast I heard that when the rent of becoming too low, like many percent negative, people will keep cash. This includes building a vault and hiring security guards.

I have been thinking about what to do as a more normal person (who doesn't want to store cash in a vault) when the rent is extremely low and the stock markets are becoming too unpredictable. As long as the property market doesn't crash, investing into property could be a good thing. I noticed that some rich people invest into art, a big of a risky business I think, and it requires proper maintenance of the pieces. Would it be a Mustachian option to invest into second hand articles? Like some nice, expensive loudspeakers or other things that are bought second hand (50% of the new price) and can be resold for practically the same price later. Normally this would end up in zero profit. But if would surely beat a negative rent, I presume?

Art and watches are decent alternatives for what you're looking for.

[nereo]

I often wonder what happened to the people that post the sky is falling threads. Did they really go to cash and are they still in cash? When the hell are they going to buy back in? 5 years from now and then smugly post back in the old thread saying I told you so!!??

On a financial podcast I heard that when the rent of becoming too low, like many percent negative, people will keep cash. This includes building a vault and hiring security guards.

I have been thinking about what to do as a more normal person (who doesn't want to store cash in a vault) when the rent is extremely low and the stock markets are becoming too unpredictable. As long as the property market doesn't crash, investing into property could be a good thing. I noticed that some rich people invest into art, a big of a risky business I think, and it requires proper maintenance of the pieces. Would it be a Mustachian option to invest into second hand articles? Like some nice, expensive loudspeakers or other things that are bought second hand (50% of the new price) and can be resold for practically the same price later. Normally this would end up in zero profit. But if would surely beat a negative rent, I presume?

Art and watches are decent alternatives for what you're looking for.

Art's a difficult one precisely because it requires even more upkeep than storing cash in a vault.  Art (as an investment) needs to be properly protected from both theft and the elements, stored properly and insured.  It's fairly illiquid, relying on auction-houses that charge a fair fee (back-loaded) and the sale price is notoriously unpredictable. Many large, fancy collections get the luxury of being put on 'permanent exhibit' at an art museum that can take care of the storage/protection aspect, but unless you have a cohesive, expensive collection its hard to find a museum willing to front the cost (and even collections worth millions are having a hard time finding museum space, since there's so much of it relative to how many museums are out there).

Like individual penny-stocks there are countless numbers of art buyers who live the dream that they'll pick up an early-stage work by someone that will become the next Picasso.

[ChpBstrd]

Plus the value of art goes down when the stock market goes down.

[Tyson]

Isn't this why we buy bonds?  So when stocks are volatile, we have a non-correlated asset that is less volatile?

[WhiteTrashCash]

I'm not really concerned about the stock market being "overvalued" because we just had two years of nearly no growth in the stock market, so as far as I'm concerned things are just averaging out. Maybe I'm just crazy, though. I'm still fairly new to investing.

[Mighty-Dollar]

There won't be a big stock market crash until the most bearish bears give up and start investing because they see the market continuing to go up and up and they've been missing out. Then we will have true irrational exuberance.

[WhiteTrashCash]

I'm not really concerned about the stock market being "overvalued" because we just had two years of nearly no growth in the stock market, so as far as I'm concerned things are just averaging out. Maybe I'm just crazy, though. I'm still fairly new to investing.

Wow...what market were you invested in.  If this period was bad, what are your expectations?  16k to 21k for DOW in last 2 years!

Remove the last twelve months and there was basically no growth in my portfolio for two years.. And I basically only invest in the entire stock market, so it was disappointing. Of course, we do have Trump to thank for it because he's convinced everybody that he's going to take all that tax money from poor people and give it to Wall Street, so yay, I guess. I'll take my piece.

[nereo]

I'm not really concerned about the stock market being "overvalued" because we just had two years of nearly no growth in the stock market, so as far as I'm concerned things are just averaging out. Maybe I'm just crazy, though. I'm still fairly new to investing.

In the last 2 years the SP500 has increased 17.53% (w/dividends reinvested) for an annualized return of 8.4%
That's not the greatest 2 year period ever, but it's in solid territory. I'd happily take this kind of growth for the next several years.

On a whole, the last 8+ years have been steller... two 'flat' years and 6 monster years.  2016 was a good year for the SP500 (+11.8%)

[WhiteTrashCash]

I'm not really concerned about the stock market being "overvalued" because we just had two years of nearly no growth in the stock market, so as far as I'm concerned things are just averaging out. Maybe I'm just crazy, though. I'm still fairly new to investing.

In the last 2 years the SP500 has increased 17.53% (w/dividends reinvested) for an annualized return of 8.4%
That's not the greatest 2 year period ever, but it's in solid territory. I'd happily take this kind of growth for the next several years.

On a whole, the last 8+ years have been steller... two 'flat' years and 6 monster years.  2016 was a good year for the SP500 (+11.8%)

I must have bought in before a correction then, because my brokerage account earned practically nothing for two years.

[nereo]

I'm not really concerned about the stock market being "overvalued" because we just had two years of nearly no growth in the stock market, so as far as I'm concerned things are just averaging out. Maybe I'm just crazy, though. I'm still fairly new to investing.

In the last 2 years the SP500 has increased 17.53% (w/dividends reinvested) for an annualized return of 8.4%
That's not the greatest 2 year period ever, but it's in solid territory. I'd happily take this kind of growth for the next several years.

On a whole, the last 8+ years have been steller... two 'flat' years and 6 monster years.  2016 was a good year for the SP500 (+11.8%)

I must have bought in before a correction then, because my brokerage account earned practically nothing for two years.

possibly?  we've only had one dip in the broader market - from Jan 1st-Feb 12, 2016. Even then it didn't rise to a correction (defined as a 10% drop from recent a recent high). What are you invested in, and are you reinvesting your dividends?

[WhiteTrashCash]

I'm not really concerned about the stock market being "overvalued" because we just had two years of nearly no growth in the stock market, so as far as I'm concerned things are just averaging out. Maybe I'm just crazy, though. I'm still fairly new to investing.

In the last 2 years the SP500 has increased 17.53% (w/dividends reinvested) for an annualized return of 8.4%
That's not the greatest 2 year period ever, but it's in solid territory. I'd happily take this kind of growth for the next several years.

On a whole, the last 8+ years have been steller... two 'flat' years and 6 monster years.  2016 was a good year for the SP500 (+11.8%)

I must have bought in before a correction then, because my brokerage account earned practically nothing for two years.

possibly?  we've only had one dip in the broader market - from Jan 1st-Feb 12, 2016. Even then it didn't rise to a correction (defined as a 10% drop from recent a recent high). What are you invested in, and are you reinvesting your dividends?

Mostly VTSAX. Yeah, I set the dividends to reinvest. I just looked at the returns graph and it dipped into losses twice over the previous two years before this year, then it trickled into earnings slightly for a little bit and then it shot up like a rocket after Trump was elected. It's the weirdest thing.

[nereo]

I'm not really concerned about the stock market being "overvalued" because we just had two years of nearly no growth in the stock market, so as far as I'm concerned things are just averaging out. Maybe I'm just crazy, though. I'm still fairly new to investing.

In the last 2 years the SP500 has increased 17.53% (w/dividends reinvested) for an annualized return of 8.4%
That's not the greatest 2 year period ever, but it's in solid territory. I'd happily take this kind of growth for the next several years.

On a whole, the last 8+ years have been steller... two 'flat' years and 6 monster years.  2016 was a good year for the SP500 (+11.8%)

I must have bought in before a correction then, because my brokerage account earned practically nothing for two years.

possibly?  we've only had one dip in the broader market - from Jan 1st-Feb 12, 2016. Even then it didn't rise to a correction (defined as a 10% drop from recent a recent high). What are you invested in, and are you reinvesting your dividends?

Mostly VTSAX. Yeah, I set the dividends to reinvest. I just looked at the returns graph and it dipped into losses twice over the previous two years before this year, then it trickled into earnings slightly for a little bit and then it shot up like a rocket after Trump was elected. It's the weirdest thing.

Yeah... I always caution against looking/planning for any period shorter than 2-3 years with market volatility the way it is. Annualized returns over the last 1 and 3 years for VTSAX has been 18.5 and 10.1%, respectively.  Sometimes you buy at a peak and it sucks.  Sometimes you buy during the dips. All-in-all it's been a pretty good ride over hte last 8 years.  Wonder when we'll hit a real rough patch next...

[nereo]

I think you may need to mentally prepare a bit more for market volatility by educating yourself, because your response suggests you may not understand stock investing yet. Imagine having an $800k stash go to $400k in 3 months.  That really happened to me with a 401K that had taken over 10 years and 10% of my savings each year, plus management bonuses as matching to hit 800k.  In 3 months it was really worth half, with the news saying the world was going down further, at the time. 

A work colleague pulled all his retirement savings into cash, and still hasnt reinvested.  He missed recovering his losses and cant afford the home he always planned to buy. 

Be ready. Be educated.

I don't want to pile on but I do think PizzaSteve has a very good point. We haven't had a real correction in about 3 years, and we've avoided any serious sustained losses (dips of 20% that last for >2 monhts) for over 5. This happens every cycle... then teh bottom drops out for a few quarters and people give in to fear.

[Tyson]

I don't want to pile on but I do think PizzaSteve has a very good point. We haven't had a real correction in about 3 years, and we've avoided any serious sustained losses (dips of 20% that last for >2 monhts) for over 5. This happens every cycle... then teh bottom drops out for a few quarters and people give in to fear.

That just seems so odd to me that people freak out over 20% drop over a few months.  A few months?  Wow.

[Tyson]

But did you actually put in $100k in the first place?  Seems more likely that you saved around $80k yourself and got around $20k in market gains.  So 'losing' $20k  puts you no worse off than cash.  And even then it's only temporary. 

I guess the other thing that feeds in to my disbelief is the timeline I'm looking at is at least 15 years before I can even touch that $$.  A drop over 2 months is just so insignificant when you're looking at a decade and a half.

[ENT Doc]

I'm not really concerned about the stock market being "overvalued" because we just had two years of nearly no growth in the stock market, so as far as I'm concerned things are just averaging out. Maybe I'm just crazy, though. I'm still fairly new to investing.

Wow...what market were you invested in.  If this period was bad, what are your expectations?  16k to 21k for DOW in last 2 years!

Can you post a link to the tax plan that will accomplish this task of taking money from the poor and giving it to the rich?  You and I must be reading very different articles.  Or interpreting them differently.
Remove the last twelve months and there was basically no growth in my portfolio for two years.. And I basically only invest in the entire stock market, so it was disappointing. Of course, we do have Trump to thank for it because he's convinced everybody that he's going to take all that tax money from poor people and give it to Wall Street, so yay, I guess. I'll take my piece.

[talltexan]

http://www.slate.com/blogs/moneybox/2017/05/16/why_are_financial_markets_still_so_calm_about_trump.html#lf_comment=690972999

It's not going down 20% in two months that's scary. It's having just gone down 20% and realizing that another 20% drop could happen over the next two months.

[Schaefer Light]

My concern is that this bull market is largely due to quantitative easing and the Fed keeping interest rates artificially low for such a long period of time.  GDP growth has been rather mild considering all the "stimulus" pumped into the economy over the last decade.  This makes me concerned that a larger than normal crash is coming.  I just wish I knew when ;).

[WhiteTrashCash]

I'm not really concerned about the stock market being "overvalued" because we just had two years of nearly no growth in the stock market, so as far as I'm concerned things are just averaging out. Maybe I'm just crazy, though. I'm still fairly new to investing.

Wow...what market were you invested in.  If this period was bad, what are your expectations?  16k to 21k for DOW in last 2 years!

Can you post a link to the tax plan that will accomplish this task of taking money from the poor and giving it to the rich?  You and I must be reading very different articles.  Or interpreting them differently.
Remove the last twelve months and there was basically no growth in my portfolio for two years.. And I basically only invest in the entire stock market, so it was disappointing. Of course, we do have Trump to thank for it because he's convinced everybody that he's going to take all that tax money from poor people and give it to Wall Street, so yay, I guess. I'll take my piece.

I was referring to the impending elimination of the ACA and transfer of the subsidies as tax cuts to the wealthy.

[triangle]

I was referring to the impending elimination of the ACA and transfer of the subsidies as tax cuts to the wealthy.

Hopefully it is apolitical to say that the ACA needs changes and that the House-of-Rep proposed AHCA is not a complete elimination of the ACA.
My understanding is that the proposed tax credits/subsidies are available to everyone and was done to give more equal treatment when compared with employer provided plans. Where currently an employer is able to provide health insurance out of the employee's pretax wages while the same person working as independent contractor or otherwise self insured buys their insurance with after tax money. Of course if one has no job or income then there may be no relief.

[taiwwa]

A few things to keep in mind:

1. The record highs of the DJIA and Nasdaq are being driven by large favored tech companies like Amazon, FB, Google, etc. This is more an enthusiasm thing IMO than rational analysis. the rest of the market is up slightly, but actually in many places is down compared to previous years. It is just that certain favored companies are seeing sky-high valuations.

2. The Market is betting on some sort of tax reform that eventually gets pushed through and that for everything else Trump will be stymied by division of power. So far they are right, but there is the problem of this latest scandal being something that might result in highly destructive impeachment proceedings.

3. The Market seems to be downplaying any possibility of debt ceiling madness or geopolitical risk. 

[WhiteTrashCash]

I'm not really concerned about the stock market being "overvalued" because we just had two years of nearly no growth in the stock market, so as far as I'm concerned things are just averaging out. Maybe I'm just crazy, though. I'm still fairly new to investing.

In the last 2 years the SP500 has increased 17.53% (w/dividends reinvested) for an annualized return of 8.4%
That's not the greatest 2 year period ever, but it's in solid territory. I'd happily take this kind of growth for the next several years.

On a whole, the last 8+ years have been steller... two 'flat' years and 6 monster years.  2016 was a good year for the SP500 (+11.8%)

I must have bought in before a correction then, because my brokerage account earned practically nothing for two years.

possibly?  we've only had one dip in the broader market - from Jan 1st-Feb 12, 2016. Even then it didn't rise to a correction (defined as a 10% drop from recent a recent high). What are you invested in, and are you reinvesting your dividends?

Mostly VTSAX. Yeah, I set the dividends to reinvest. I just looked at the returns graph and it dipped into losses twice over the previous two years before this year, then it trickled into earnings slightly for a little bit and then it shot up like a rocket after Trump was elected. It's the weirdest thing.

I think you may need to mentally prepare a bit more for market volatility by educating yourself, because your response suggests you may not understand stock investing yet. Imagine having an $800k stash go to $400k in 3 months.  That really happened to me with a 401K that had taken over 10 years and 10% of my savings each year, plus management bonuses as matching to hit 800k.  In 3 months it was really worth half, with the news saying the world was going down further, at the time. 

A work colleague pulled all his retirement savings into cash, and still hasnt reinvested.  He missed recovering his losses and cant afford the home he always planned to buy. 

Be ready. Be educated.

Thanks. I've only been investing for 2 and a half years and I've only recently invested enough to start thinking about investment strategies, etc., so I'm very new to everything. I know I have a lot to learn.

[nereo]

A few things to keep in mind:

1. The record highs of the DJIA and Nasdaq are being driven by large favored tech companies like Amazon, FB, Google, etc. This is more an enthusiasm thing IMO than rational analysis. the rest of the market is up slightly, but actually in many places is down compared to previous years. It is just that certain favored companies are seeing sky-high valuations.

2. The Market is betting on some sort of tax reform that eventually gets pushed through and that for everything else Trump will be stymied by division of power. So far they are right, but there is the problem of this latest scandal being something that might result in highly destructive impeachment proceedings.

3. The Market seems to be downplaying any possibility of debt ceiling madness or geopolitical risk.

Re: #1 - I have no idea where you are getting your information.  Looking simply at the DJIA (composed of 30 stocks), 20 of them are currently trading higher YTD.  Only 10 trail.  Of those 20 which are in positive-land, 14 are up at least 6% for the year. Similar story with the NASDAQ, and FB/GOOG/AMZN are in the middle of that pack.
A better metric is to look at market sectors. Yes IT is up, but so is retail, consumer services, health care, new home construction, etc.
It's pretty broad-based as rallies go.

[Linea_Norway]

I have given up now on timing the market. It seems to be going up all of the time. But I buy stock every month with the left over money on my bank account, spreading over funds over the world. I hope this will level out for most fluctuations.

[BlueHouse]

I saw a thread from 3 years ago - the OP was getting into cash because he felt a correction was coming.  But the market just kept going up and up and up.  Dow Jones was at 16,000 then, it's at $20,000 now.  Look at all that money he missed out on, by sitting on cash waiting.  Timing the market is a fools errand.

Was it me?  I was sitting on a lot of cash worrying about when to push it in.  So sorry I kept way too much cash in 2009-2013.   Then I eventually got it all into VTSAX and it has gone up even more.  Now I have another chunk in cash (~100k) and am afraid to put it all in at once again!  I just can't seem to learn! 

(actually, when I saw Wednesday's drop, I moved $20K into VTSAX, so I'm trying to get it all moved over...just waiting for opportune moments)

[Tyson]

I saw a thread from 3 years ago - the OP was getting into cash because he felt a correction was coming.  But the market just kept going up and up and up.  Dow Jones was at 16,000 then, it's at $20,000 now.  Look at all that money he missed out on, by sitting on cash waiting.  Timing the market is a fools errand.

Was it me?  I was sitting on a lot of cash worrying about when to push it in.  So sorry I kept way too much cash in 2009-2013.   Then I eventually got it all into VTSAX and it has gone up even more.  Now I have another chunk in cash (~100k) and am afraid to put it all in at once again!  I just can't seem to learn! 

(actually, when I saw Wednesday's drop, I moved $20K into VTSAX, so I'm trying to get it all moved over...just waiting for opportune moments)

I think it was.  Oh man, how much did that cost you by sitting out with that much cash?  Did you ever calculate how much more you would have right now if you'd just just dumped it in the market?

[triangle]

A few things to keep in mind:

1. The record highs of the DJIA and Nasdaq are being driven by large favored tech companies like Amazon, FB, Google, etc. This is more an enthusiasm thing IMO than rational analysis. the rest of the market is up slightly, but actually in many places is down compared to previous years. It is just that certain favored companies are seeing sky-high valuations.

2. The Market is betting on some sort of tax reform that eventually gets pushed through and that for everything else Trump will be stymied by division of power. So far they are right, but there is the problem of this latest scandal being something that might result in highly destructive impeachment proceedings.

3. The Market seems to be downplaying any possibility of debt ceiling madness or geopolitical risk.

Re: #1 - I have no idea where you are getting your information.  Looking simply at the DJIA (composed of 30 stocks), 20 of them are currently trading higher YTD.  Only 10 trail.  Of those 20 which are in positive-land, 14 are up at least 6% for the year. Similar story with the NASDAQ, and FB/GOOG/AMZN are in the middle of that pack.
A better metric is to look at market sectors. Yes IT is up, but so is retail, consumer services, health care, new home construction, etc.
It's pretty broad-based as rallies go.

I think the issue related to #1 is that many of the largest stocks have had bigger percentage gains. So even though many stocks are up the performance of some of the indexes is driven disproportionately due to the larger technology companies. I could not find the reference I was searching for but this one is pretty good:  http://www.zerohedge.com/news/2017-05-06/five-largest-stocks-account-42-nasdaq-and-why-goldman-clients-are-concerned

Where the highlight of that article would be: "Nasdaq (100) is so concentrated at the stock-level, the five largest stocks comprising 42% of the index compared with 13% of S&P 500."  These five stocks are Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), Amazon (AMZN), and Facebook (FB).

 

[nereo]

A few things to keep in mind:

1. The record highs of the DJIA and Nasdaq are being driven by large favored tech companies like Amazon, FB, Google, etc. This is more an enthusiasm thing IMO than rational analysis. the rest of the market is up slightly, but actually in many places is down compared to previous years. It is just that certain favored companies are seeing sky-high valuations.

2. The Market is betting on some sort of tax reform that eventually gets pushed through and that for everything else Trump will be stymied by division of power. So far they are right, but there is the problem of this latest scandal being something that might result in highly destructive impeachment proceedings.

3. The Market seems to be downplaying any possibility of debt ceiling madness or geopolitical risk.

Re: #1 - I have no idea where you are getting your information.  Looking simply at the DJIA (composed of 30 stocks), 20 of them are currently trading higher YTD.  Only 10 trail.  Of those 20 which are in positive-land, 14 are up at least 6% for the year. Similar story with the NASDAQ, and FB/GOOG/AMZN are in the middle of that pack.
A better metric is to look at market sectors. Yes IT is up, but so is retail, consumer services, health care, new home construction, etc.
It's pretty broad-based as rallies go.

I think the issue related to #1 is that many of the largest stocks have had bigger percentage gains. So even though many stocks are up the performance of some of the indexes is driven disproportionately due to the larger technology companies. I could not find the reference I was searching for but this one is pretty good:  http://www.zerohedge.com/news/2017-05-06/five-largest-stocks-account-42-nasdaq-and-why-goldman-clients-are-concerned

Where the highlight of that article would be: "Nasdaq (100) is so concentrated at the stock-level, the five largest stocks comprising 42% of the index compared with 13% of S&P 500."  These five stocks are Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), Amazon (AMZN), and Facebook (FB).

I understand how the indices are weighted, and that gains by the largest companies move the market a greater amount, but that alone doesn't explain the earlier poster's comments.
For example: he rest of the market is up slightly, but actually in many places is down compared to previous years.  It's simply not true, and it has nothing to do with the indices themselves.  We have had a fairly broad-based rally, and some of the biggest gainers in terms of stock price have not been the companies with the largest market cap.

Honestly I'm just trying to dispel false notions here.  People hear the talking heads on TV say something like "well the SP500 is up 7.1% so far this year, but more than half of the gains can be attributed to just five companies."

The uninformed may (falsely) reach the conclusion that most of the remaining 495 companies are not doing well. That is often not the case, and it certainly isn't right now.

[triangle]

I am not trying to argue with your comments, and I understand we are on an internet forum where it is more difficult to have a conversation, but I think things are not so clear. Certainly not so clear to respond "Where are you getting your information" to OP's opening statement and presumably their main point "record highs record highs of the DJIA and Nasdaq are being driven by large favored tech companies..."

I totally agree with your response about index weighting. The data point I was trying to originally look up but failed to find was how much do the top 5, 10, 20 stocks have on the index value now as compared to the historical norm. That would be interesting to know and central to whether the "alarm" raised in the ZeroHedge article was warranted or just the normal ZH gloomy outlook.

Looking at my portfolio I see that KO, PG, and GE are looking pretty flat over the last few years when looking backward at previous highs. Appears that MRK, PFE, CAT, IBM, DIS are similar. I did not go check all the Dow 30, but these are most of the ones I suspected were flatish (which would be at least 25% of the index membership). This time period also includes the run up preceding Brexit and US Presidential election bounce back so there are lot of political events occurring in addition to the Fed pumping money into the financial sector providing extra lift for most stocks.

[BlueHouse]

I saw a thread from 3 years ago - the OP was getting into cash because he felt a correction was coming.  But the market just kept going up and up and up.  Dow Jones was at 16,000 then, it's at $20,000 now.  Look at all that money he missed out on, by sitting on cash waiting.  Timing the market is a fools errand.

Was it me?  I was sitting on a lot of cash worrying about when to push it in.  So sorry I kept way too much cash in 2009-2013.   Then I eventually got it all into VTSAX and it has gone up even more.  Now I have another chunk in cash (~100k) and am afraid to put it all in at once again!  I just can't seem to learn! 

(actually, when I saw Wednesday's drop, I moved $20K into VTSAX, so I'm trying to get it all moved over...just waiting for opportune moments)

I think it was.  Oh man, how much did that cost you by sitting out with that much cash?  Did you ever calculate how much more you would have right now if you'd just just dumped it in the market?

Ha. No. That's just not how I think. I don't really like to focus on what woulda coulda shoulda happened. I look at my life and I am embarrassed by the opportunities available and the riches I have amassed. I'm not particularly special, just a hard worker, reasonably intelligent, and lucky to be born in the US with parents who valued education and could help me navigate the red tape to get that education.
I feel incredibly lucky and I feel like my investments have done extremely well. Every day I wake up and think holy shit, look how much money is in that account!  Next thought is not how much more I could have, but how easily it might all be lost!  I am definitely risk averse. I bought a big oversized house because I was more interested in preservation of wealth and the security of having a place to live than in growing my money. 
Different risk tolerance from most here and different goals too.

[Tyson]

I saw a thread from 3 years ago - the OP was getting into cash because he felt a correction was coming.  But the market just kept going up and up and up.  Dow Jones was at 16,000 then, it's at $20,000 now.  Look at all that money he missed out on, by sitting on cash waiting.  Timing the market is a fools errand.

Was it me?  I was sitting on a lot of cash worrying about when to push it in.  So sorry I kept way too much cash in 2009-2013.   Then I eventually got it all into VTSAX and it has gone up even more.  Now I have another chunk in cash (~100k) and am afraid to put it all in at once again!  I just can't seem to learn! 

(actually, when I saw Wednesday's drop, I moved $20K into VTSAX, so I'm trying to get it all moved over...just waiting for opportune moments)

I think it was.  Oh man, how much did that cost you by sitting out with that much cash?  Did you ever calculate how much more you would have right now if you'd just just dumped it in the market?

Ha. No. That's just not how I think. I don't really like to focus on what woulda coulda shoulda happened. I look at my life and I am embarrassed by the opportunities available and the riches I have amassed. I'm not particularly special, just a hard worker, reasonably intelligent, and lucky to be born in the US with parents who valued education and could help me navigate the red tape to get that education.
I feel incredibly lucky and I feel like my investments have done extremely well. Every day I wake up and think holy shit, look how much money is in that account!  Next thought is not how much more I could have, but how easily it might all be lost!  I am definitely risk averse. I bought a big oversized house because I was more interested in preservation of wealth and the security of having a place to live than in growing my money. 
Different risk tolerance from most here and different goals too.

I hear you :)  I too have an expensive house.  Not big, but holy crap expensive.  I relate a LOT to your experience of opening your accounts and "hey, more money!".  Haha, that's such an awesome feeling.  I think the place we differ is comfort with risk.  I look at all the massive horrible crap the stock market has endured (and them came roaring back even stronger) that I never worry about the drops.  Just the nature of the game. 

I think part of it is that I almost feel like that $$ is not 'real' if you get what I'm saying?  Like it seems almost as though it's just some numbers on a screen.  It goes down sometimes, it goes up sometimes, but mostly my life stays exactly the same.  Not sure why, but that's how I feel.