The headwinds facing stocks and bonds are hardly laughable compared with 2000 or 2008. Sure stocks were overpriced in those days. But at least bonds had much more room to appreciate not to mention much better coupon. These days both bonds and stocks are priced for perfection. Chances are pretty good that during the next tumble both will fall in value in tandem turning so called balanced portfolios into a bunch of turd.
Haha, they sure were overpriced! Not so much in 2008, but in 2000 the P/E on the NASDAQ was something like over 150! Kind of puts that S&P 500 P/E of 25 into perspective? Look, markets rarely make big moves based on their own fundamentals. The 2000 bubble is a pretty good example of just the sort of market imbalances that are required before they will make a move based on their own fundamentals. The 2008 decline and the recent China initiated decline is more how it usually happens: some external factor sends the market into decline.
And so what if bonds had more room to appreciate back then? Interest rates and bond prices go up and down. Soon, rates will probably rise and bond prices will fall. But you know what? Interest rates have gone up before. The world didn't end then. It won't end this time either. Thing is, bonds have looked like a terrible investment for a long time now. Rates are going to go up any day now! And yet, year after year. Here we are. You're short bonds? How long are you willing to wait? The Fed isn't going to raise rates now in September. Then, something will happen in the Fall and they won't raise rates in December either. Why should they? Inflation is real low. Employment seems tight, but you still have a lot of people not returning to the workforce. Then, you've got an election year. Think Fed is going to raise rates in an election year where one of the main issues is going to be the ongoing discrepancy between low wages workers and their CEO's? Yeah good luck with that. Hope you're prepared to hold that short for another year and a half at least.
See that's the problem with "contrarian" investing. Not only do you have to be right, but you have to be precise as well...you need to guess the direction of the market AND the timing. THEN, you need to get it right on the backside as well. I actually think you're 100% right about the market being pricey. But that doesn't tell me shit about what's going to happen.