Dow closed below 17,000 yesterday....

[brooklynguy]

I expect the crash will accelerate my FI plans.

Will it really accelerate your FI plans, or just bolster the chances of your FI plans' success?  Does it depend on how long the crash lasts?

It is true that market drops are necessarily favorable for accumulators for so long as they choose to remain accumulators (except to the extent they are correlated with other events that are unfavorable for accumulators, such as layoffs), but every accumulator wants at some point to become a withdrawer.

I've come to believe that, for those of us still in the accumulation phase but closing in on retirement, market gyrations are more likely to delay our decision to retire than to accelerate it.  I think most of us mentally establish a target number and tell ourselves that when our stash hits that number, we will retire.  We have a rough idea of when that date will occur based on our projections (with investment returns being the most difficult variable to accurately project), but we know it could arrive sooner or later than projected.  In practice, if market returns power our portfolios to the finish line earlier than projected, I think most of us will decide to push back the finish line to compensate for the increased risk of retiring in a potentially overvalued market.  However, if market underperformance delays our arrival to the finish line, I don't think most of us would be comfortable taking the reverse approach and pulling the trigger on our projected retirement date (before he hit our target) in reliance on the market's potential undervaluation.  So we end up either retiring on schedule or behind schedule, but never ahead of schedule.

Or maybe I'm just extrapolating what I foresee to be my own tendencies to everyone else?

[thd7t]

Man, I start a thread, get bashed for even thinking this might turn into a bear market, get told 17,000 had no meaning, and now we're -500 pts today on the DOW, and there are 40 more posts here.  I guess I just had to wait for other opinions - and whether or not it ends the bull market is something I don't know, I mentioned that I had read 17k was a resistance point, and mentioned we could trade sideways or down - obviously, it could find support early next week and make gains.  I just was aware of it, and wanted to get people's points of view.

You never really mentioned why the people you were citing thought that 17,000 was a resistance point, which may have been part of the resistance you were hearing.  It marked at 7% drop, which is still a pretty small correction, particularly given how long it's lasted.  A little more information from you might have changed how the early discussion went.

[sol]

I expect the crash will accelerate my FI plans.

Will it really accelerate your FI plans, or just bolster the chances of your FI plans' success? 

In my case, pulling the trigger is based on a probability of swr success, which depends on both account balances and expectations of future returns.  In a crash one of those goes up and one goes down, but my new purchases add more to one than the other relative to before the crash.  As long as I'm investing the same amounts on the same schedule, the net effect is slightly positive.

[brooklynguy]

In my case, pulling the trigger is based on a probability of swr success

How do you calculate probability of SWR success?

[TheInsuranceMan]

Man, I start a thread, get bashed for even thinking this might turn into a bear market, get told 17,000 had no meaning, and now we're -500 pts today on the DOW, and there are 40 more posts here.  I guess I just had to wait for other opinions - and whether or not it ends the bull market is something I don't know, I mentioned that I had read 17k was a resistance point, and mentioned we could trade sideways or down - obviously, it could find support early next week and make gains.  I just was aware of it, and wanted to get people's points of view.

You never really mentioned why the people you were citing thought that 17,000 was a resistance point, which may have been part of the resistance you were hearing.  It marked at 7% drop, which is still a pretty small correction, particularly given how long it's lasted.  A little more information from you might have changed how the early discussion went.

Oh, I get that 100%.  It had just been one of the numbers I had read about, most near that 17k mark.  And yes, pretty insignificant drop thus far, but something I imagine a lot of people are going to be keeping their eye on.

[sol]

In my case, pulling the trigger is based on a probability of swr success

How do you calculate probability of SWR success?

It's a proprietary combination of cFIREsim, CAPE, and voodoo chicken sacrifice.

[iamlindoro]

The only problem I have is that I'm not scheduled to buy again for ten days.  Hope it continues to drop, this is awesome!

Yay dollar cost averaging!

Maybe you could slip an extra buy in there inside 10 days?

Isn't dollar cost demonstrably worse then just buying as soon as you have the money available?

To clarify, I buy when I get paid, so I'm not dollar cost averaging in that I'm not holding anything back-- if I could find a way to get paid on demand, well then... I'd probably have...

[Jersey Brett]

We'll have to agree to disagree on this, I wish you the best.

I wish you the best as well, while parking my boat inside my boat.

[MoonShadow]

Fire sale!

[MoonShadow]

It's a better use of my time to figure out a better/cheaper way to accomplish some necessary household thing than it is to try and time the market.

This is it, exactly.  We invest in the stock market because it's the best place to store and grow money, but we get more out of altering our lifestyle.  I'm currently in the process of finishing my basement, and am personally installing a hydronic loop with a tote as a water storage tank.   I'm doing almost all the work myself.

If you have a yard, another good investment is a local master gardening course.

If you have access to lots of trees; a woodstove, rechargable chainsaw and electric wood splitter are excellent investments.

We all have real investments in our own lifestyle that can return better than the stock market could.

[forummm]

I expect the crash will accelerate my FI plans.

Will it really accelerate your FI plans, or just bolster the chances of your FI plans' success? 

In my case, pulling the trigger is based on a probability of swr success, which depends on both account balances and expectations of future returns.  In a crash one of those goes up and one goes down, but my new purchases add more to one than the other relative to before the crash.  As long as I'm investing the same amounts on the same schedule, the net effect is slightly positive.

My analysis also indicates that I'll be quite a bit richer (by 3x my annual net income) if the market drops 20% by the end of the year (to a historically average PE) and then proceeds in a more historically average rate of return for the next 5 years vs staying where it is now and proceeding to a historically average PE at the end of 5 years (the same market price as in the first scenario). The benefit of the market drop is amplified if the market moves to a higher than historically average PE instead of just historically average.

[anotherAlias]

I'm about ten years out from FIRE and just finished up saving up for a down payment on a yet to be found home.  So I see this as great timing.  Stocks are on sale and I finally have extra cash to invest again.

[Miss Prim]

Even though I just retired in April, my lump sum pension has been sitting in cash so I am planning on buying!  Glad I waited a few months.  I was just going to start moving it to some funds, so now I will definitely take advantage of this.  I did not take an annuity because my hospital was the one that was offering it, and I didn't trust that it would be there.  They have had years where they were underfunded. 

                                                               Miss Prim

[Bracken_Joy]

It's a better use of my time to figure out a better/cheaper way to accomplish some necessary household thing than it is to try and time the market.

This is it, exactly.  We invest in the stock market because it's the best place to store and grow money, but we get more out of altering our lifestyle.  I'm currently in the process of finishing my basement, and am personally installing a hydronic loop with a tote as a water storage tank.   I'm doing almost all the work myself.

If you have a yard, another good investment is a local master gardening course.

If you have access to lots of trees; a woodstove, rechargable chainsaw and electric wood splitter are excellent investments.

We all have real investments in our own lifestyle that can return better than the stock market could.

I love this view.

[brooklynguy]

My analysis also indicates that I'll be quite a bit richer (by 3x my annual net income) if the market drops 20% by the end of the year (to a historically average PE) and then proceeds in a more historically average rate of return for the next 5 years vs staying where it is now and proceeding to a historically average PE at the end of 5 years (the same market price as in the first scenario). The benefit of the market drop is amplified if the market moves to a higher than historically average PE instead of just historically average.

It's the "and then proceeds" part that's the key.  Each of us may hope for the market to generate a sequence of returns that aligns best with our own retirement plans, but we can only play the hand we're dealt.

[Bob W]

You think it was bad today?   You should see next Wednesday!

[forummm]

My analysis also indicates that I'll be quite a bit richer (by 3x my annual net income) if the market drops 20% by the end of the year (to a historically average PE) and then proceeds in a more historically average rate of return for the next 5 years vs staying where it is now and proceeding to a historically average PE at the end of 5 years (the same market price as in the first scenario). The benefit of the market drop is amplified if the market moves to a higher than historically average PE instead of just historically average.

It's the "and then proceeds" part that's the key.  Each of us may hope for the market to generate a sequence of returns that aligns best with our own retirement plans, but we can only play the hand we're dealt.

The analysis isn't dependent on the "and then proceeds" so much. It was just a specific scenario that would provide a specific value to show how much richer I would be. If the market is going to end up at value X in Y years and you'll be saving Z dollars per year, it's better for it to be lower in the interim, regardless of X, Y, and Z for people still accumulating.

[brooklynguy]

The analysis isn't dependent on the "and then proceeds" so much. It was just a specific scenario that would provide a specific value to show how much richer I would be. If the market is going to end up at value X in Y years and you'll be saving Z dollars per year, it's better for it to be lower in the interim, regardless of X, Y, and Z for people still accumulating.

This conversation feels like déjà vu -- I just looked back and there was a discussion where I made the same point (using similar language, just missing the Z variable :) ) and foobar gave a pretty insightful response that I think is worth repeating:

So the accumulators in Japan must be loving it.

For as long as they choose to remain accumulators, they should be.  The problem is that, as you alluded to, at some point every accumulator wants to stop being an accumulator and start being a withdrawer.  But it's still true that, for as long someone does choose to remain an accumulator, low prices are necessarily better than high prices.

Your comparison of the two historical time periods is really illustrating a different (but related) point--namely, that you want prices to be high when you're ready to stop being an accumulator (and, again, the problem is that, if you're waiting for your portfolio to cross a predetermined threshold value as your trigger for transitioning from accumulator into non-accumulator, as most of us are indeed doing, then poor returns are a problem in the sense that they could delay that transition point (i.e., delay your retirement)).  But if you're going to retire on date X, and on that date the market is going to have a value of Y, then the longer and the farther the market remains below Y between now and date X (i.e., the period during which you're doing your accumulating), the better.

Actually comparision just shows how much luck rules:) The assumption that 5 years of 0% return will result in higher returns in the future is borderline at best.  Buying off dips (things like 2000-2002, 2008-2009) when the market over reacts is one thing but prolonged periods of no growth often are driven by some underlying economic problems. Instead of getting delayed growth, you can end up with just lost growth.  Think about it like the underemployed college graduated. Those 3 years spent waiting instead of working on the career don't result in higher earnings later in life. They just result in lost opportunity cause.

In reality you can't time any of this. You have to play the game with the hand your dealt. A decade of 0% returns so soon after 2000-2010 would set us up for one of the worst 30 year periods in US history. Could happen. But it seems pretty unlikely to me. On the other hand contining the pace of the last 5 years also seems unlikely.

[milesdividendmd]

I expect the crash will accelerate my FI plans.

My account value will drop but the P/E is better, and I'm still adding a fixed amount each week so my buys are effectively buying me a higher P/E today than they were last week.  This can only help.

I think you mean a lower P/E, but I agree. Your dividend yield will also grow, an excellent thing as long as you are in the accumulation phase.

That being said this is early days, the market could easily bounce back from this on Monday, rendering this whole discussion meaningless.

There could be second order reactions, like the Chinese could lower interest rates this weekend causing the markets to rally.

The fact that this minor correction is garnering so much attention is a great lesson as to our disproportionate sensitivity to losses. And I'm no different. Looking at my account balances today was truly shocking.

[soccerluvof4]

This is why its important to have a plan and stick to it...! For me it was a 10k buying opportunity. I hope it goes down as I am looking forward to buy on sale!

[libertarian4321]

I'm going to do exactly what I've done during the past 27 panics.

Not a damned thing.

I'm going to keep investing regularly, just as I did during all the panics and "crashes" over the past 30 years:  1987, 1990, 1992, 1997, 2000, 2001, 2003, 2008, 2011, etc.

For those who are old enough to remember the crash of '87, remember people were jumping off buildings?  Look at a DOW chart today.  That "crash" is a barely noticeable "blip" on the chart.

Damn it, if only I'd panicked (er, "market timed") and sold off during all those crashes rather than continuing to invest, I'd probably be millionaire today (instead of being a multimillionaire).

[MrStash2000]

You think it was bad today?   You should see next Wednesday!

Care to tell us what happens next Wednesday?

[forummm]

you're not going to like this but here goes. Technical analysis is not phrenology. The people that do it right are billionaires several times over. Some of them started with $3000.

Since you say they exist, please provide at least 2 names of people who currently have at least $3 billion and started with only $3000 and made their fortunes strictly through active trading of trends already in progress (and not through some kind of active management or influencing of prices or businesses).

Bruce Kovner
Mark Weinstein

Thanks for providing the names. I don't think either meet the criteria fully. I couldn't find anything saying Mark Weinstein was a multi-billionaire. In fact on a list of the best traders ever, he didn't appear in the top 10 (going down to $2.5 billion). It appears Kovner did start with $3k, and now has several billion dollars, but he acquired that by running a large hedge fund. So he was taking other people's money, and having hundreds of his staff work on the fund too. He may be a very good trader, but he got rich by running a business, and almost certainly was influencing the markets he was in, and quite likely used inside information routinely.

[Davids]

Does not bother me, I will keep investing,

[forummm]

The analysis isn't dependent on the "and then proceeds" so much. It was just a specific scenario that would provide a specific value to show how much richer I would be. If the market is going to end up at value X in Y years and you'll be saving Z dollars per year, it's better for it to be lower in the interim, regardless of X, Y, and Z for people still accumulating.

This conversation feels like déjà vu -- I just looked back and there was a discussion where I made the same point (using similar language, just missing the Z variable :) ) and foobar gave a pretty insightful response that I think is worth repeating:

So the accumulators in Japan must be loving it.

For as long as they choose to remain accumulators, they should be.  The problem is that, as you alluded to, at some point every accumulator wants to stop being an accumulator and start being a withdrawer.  But it's still true that, for as long someone does choose to remain an accumulator, low prices are necessarily better than high prices.

Your comparison of the two historical time periods is really illustrating a different (but related) point--namely, that you want prices to be high when you're ready to stop being an accumulator (and, again, the problem is that, if you're waiting for your portfolio to cross a predetermined threshold value as your trigger for transitioning from accumulator into non-accumulator, as most of us are indeed doing, then poor returns are a problem in the sense that they could delay that transition point (i.e., delay your retirement)).  But if you're going to retire on date X, and on that date the market is going to have a value of Y, then the longer and the farther the market remains below Y between now and date X (i.e., the period during which you're doing your accumulating), the better.

Actually comparision just shows how much luck rules:) The assumption that 5 years of 0% return will result in higher returns in the future is borderline at best.  Buying off dips (things like 2000-2002, 2008-2009) when the market over reacts is one thing but prolonged periods of no growth often are driven by some underlying economic problems. Instead of getting delayed growth, you can end up with just lost growth.  Think about it like the underemployed college graduated. Those 3 years spent waiting instead of working on the career don't result in higher earnings later in life. They just result in lost opportunity cause.

In reality you can't time any of this. You have to play the game with the hand your dealt. A decade of 0% returns so soon after 2000-2010 would set us up for one of the worst 30 year periods in US history. Could happen. But it seems pretty unlikely to me. On the other hand contining the pace of the last 5 years also seems unlikely.

I agree that stagnant markets are "often" driven by underlying problematic economic conditions. I think that a scenario where the market is stagnant from now until 2020 doesn't have to be accompanied by a poor economy. The fundamentals can continue to grow--in fact they would need to continue to grow in order to return the market to a historically average PE. A 3% total return (2% dividends, 1% price) for each of the next 5 years with continued underlying earnings growth of 6% is what would be needed to bring the ttm PE back to 16.5 (a historically typical value). So the economy could be chugging right along, but the difference could be that investors start to require more of a historically normal valuation to participate in stock markets. This could be for any number of factors such as the availability of better returns than we've had recently (such as new business ventures, better bond interest rates, etc).

Another scenario (perhaps more likely) is that investors suddenly say "hey, why are we overpaying for the stocks" and pull out and the market drops quite a bit until a more appropriate PE is reached.

In both these scenarios, fundamental underlying growth could keep chugging away at 6% YOY, with no sign of stopping, providing an indication of healthy future returns.

[larmando]

I'm happy of the drop as I've started investing seriously one year ago and it's good to test my risk tolerance. My account is sitting quite in the red and I don't feel a problem with it, so far so good. Unfortunately I can't buy until September, but we'll see, it might also go further down.

Sent from my Nexus 6 using Tapatalk

[Pooperman]

This is basically what I expected this year. A correction is necessary, and stocks being flat makes sense as well. The economy is doing fine, and will for another year or so before the next recession (2016/2017). I don't expect the recession to be particularly bad, only a mild inconvenience. Inflation hasn't happened yet, but it will by necessity as part of the effect of QE. I can't say when that will occur, but probably after 2020.

Nothing (in the USA) right now is frothy. Real estate is kinda back after 10 years, stocks are moderately overvalued, bond yields are a bit low, inflation is minimal. It just seems odd because of inflation/rates. If you add 3% to everything, it looks kinda normal. No asset class is really on sale.

I generally see a forward trend similar to the 1970s unfolding. Good for those accumulating, bad for retirees. Stock P/E has to drop somehow, and inflation has usually been the driver of that. Sustained sideways markets may give rise to "the death of equities" again.

[forummm]

Inflation hasn't happened yet, but it will by necessity as part of the effect of QE. I can't say when that will occur, but probably after 2020.

Why is that a necessity? I assume you mean high inflation. We've had low inflation (in line with Fed targets) for the post-2008 period. It's only necessary if the QE lasts too long (i.e. once the investment environment starts too look better and businesses/banks move all that cash off the sidelines and the QE is still in place).

[Paul der Krake]

As a youngin with a total investor career of less than 3 years, this is actually exciting. This is my first real unrealized loss, in which the value of my portfolio dropped more in two days than my solid middle class income brings in a month. It's something to read about it from the wiser and older folks here, but something else to finally see it in person after years of a seemingly never-ending bull market.

To many more ups and downs! Weeeeeeeeee.

[iris lily]

You know that technical analysis is financial phrenology, right?

Weekly perturbations. Financial phrenology.

LOL. The wordsmithing is  killing me!

[WolfpackFan]

Technical analysis is not phrenology. The people that do it right are billionaires several times over. Some of them started with $3000.

Of the 319 million people in the US there are only 615 total billionaires in the United States.  Of those 615 I'm not sure how many are billionaires "several times over" that started with $3k but I'm guessing it's not many.

That's astounding you are one of those less than 615 people who are able to read bollinger bands on a stock chart to know when to time the market.

Folks, we've got a truly remarkable 1.97e-6 percenter in our midst!  I bow down to you sir!

[MidWestLove]

"Technical analysis is not phrenology. The people that do it right are billionaires several times over. Some of them started with $3000."

hilarious - unless you are selling this trash (as instructional courses for low fee of few thousand an attendee or annual subscription to some magic newsletter), it is BS. 'people who it right' is the same excuse to people who play the lottery right.  if you play the lottery right (buy my system, buy my system!) you may be a billionair several times over.

on a serious note, if that works for you - good for you, enjoy the random walk until it runs out. for anyone else in investing, this is a sucker bet. don't get sucked in.

[Jersey Brett]

Larry Hite (started Mint with George Soros, before that he managed bands. He joked that he was the only one he knew who left music to pursue a career in finance)

Richard Dennis started with $1600 he borrowed from his family. His seat on the exchange cost $1200 leaving him $400 to trade with.

The list goes on endlessly. Its not as hard as you all think. Like anything else it just takes work and dedication. Aptitude certainly doesnt hurt.

[WolfpackFan]

The list goes on endlessly. Its not as hard as you all think. Like anything else it just takes work and dedication. Aptitude certainly doesnt hurt.

That's fantastic news!  And right in the face of simple to follow logic.  There are only 615 billionaires but the list of those who amassed their multi-billion dollar empire by reading bollinger bands and starting from a paycheck from Walmart is endless AND here's the kicker.. "it's not hard at all to do!"

Aptitude optional!

[Jersey Brett]

But like they say on Jackass, don't try this at home, certainly not armed with one piece of information like support at 17,000. Its support at 17,000 until its not, then its some other imaginary number. I dont use support, volume, wave, fibonnaci etc. I do use moving average, but mostly its experience the cost of which is getting it wrong for a long time. I was fortunate in that i bet small and my tuition was cheap. Its not gambling but you need that skill.

You cant win if you don't bet.
you cant bet if you lose all your chips.

[WolfpackFan]

Jersey Brett, since you've mentioned you keep detailed records can you provide your ROI from last year?

To go from 3k to 2B in 30 years you'll need to ensure you're getting at least a 56.4% return every year!  That's probably not too hard to do at all!

You know what would be super helpful to the community?  If you could start a thread to post your trades that you're executing to realize these easy returns!  Then we can all turn our thermostats lower in the summers.

[Jersey Brett]

You don't need my help Wolfpack. I hear sarcasm pays at least a 43.2% return these days.

Brett

72.4% of all statistics are completely made up.

[cavewoman]

I'm learning my first real life lessons in my personal risk tolerance levels.

I only started my 457 plan in May.  Have yet to see any gains.  I'm trying to check myself for looking at my balance every other day (whoops!  baby mustachian mistake and I know better!) but the good news is I'm not reducing my contribution or having trouble falling asleep at night.  I've even increased my contribution a little.

But I did open this thread for a little reassurance and reality check :)

[Pooperman]

Inflation hasn't happened yet, but it will by necessity as part of the effect of QE. I can't say when that will occur, but probably after 2020.

Why is that a necessity? I assume you mean high inflation. We've had low inflation (in line with Fed targets) for the post-2008 period. It's only necessary if the QE lasts too long (i.e. once the investment environment starts too look better and businesses/banks move all that cash off the sidelines and the QE is still in place).

At some point the bonds will be sold or they will expire and the money returned to circulation. I mean, yes, it's fiat currency so it doesn't follow the same rules as backed currencies. But still, the money exists now, so unless they unmake it, the supply will increase, causing inflation.

[WolfpackFan]

According to this list from September 2014 there are only 213 billionaires in the US that have amassed 3 billion dollars, which should fit Brett's criteria of "billionaire several times over".

http://www.forbes.com/sites/afontevecchia/2014/09/29/forbes-400-full-list-of-americas-richest-people/

Look at that, it also conveniently lists their source of wealth.  As I'm going through this "endless" list though I'm unfortunately having difficulty finding people who's source of wealth being listed as $3k in their Scottrade account.  Probably just typos though because we know the list is endless according to you, Brett.  I'll take your word over Forbes any day.

Looking forward to reading your post in the accomplishments thread of your first billion, Brett!

Edit: Okay, I'm done here lol

[milesdividendmd]

Inflation hasn't happened yet, but it will by necessity as part of the effect of QE. I can't say when that will occur, but probably after 2020.

Why is that a necessity? I assume you mean high inflation. We've had low inflation (in line with Fed targets) for the post-2008 period. It's only necessary if the QE lasts too long (i.e. once the investment environment starts too look better and businesses/banks move all that cash off the sidelines and the QE is still in place).

QE in the U.S. Is over and has been over since last October.

There will be hyperinflation again in the future. There will be deflation. There will be recessions and depressions and bubbles.

But this chicken little obsession with inflation and its relationship to post 2008 monetary policy has been consistently wrong, and is thus best ignored. It's part of an irrational economic strain of thought that has correctly predicted nothing.

[Jersey Brett]

I'm unfortunately having difficulty finding people who's source of wealth being listed as $3k in their Scottrade account.

How many listed sarcasm as their source of income?

What's the name of your wolfpack, "Runs into walls"? "Boner Killers?" "Off my Meds"?

Take it easy Cujo. Deep breaths are free.

[Cathy]

User WolfpackFan appears to be fairly hardcore, registering an account on the forum just to respond humourously to some highly dubious assertions. I hope he or she will post in other threads.

[WolfpackFan]

User WolfpackFan appears to be fairly hardcore, registering an account on the forum just to respond humourously to some highly dubious assertions. I hope he or she will post in other threads.

I signed up about a week ago but today was the first time I had the urge to post.  One of my pet peeves is folks claiming it's easy to beat the market, especially while at the same time disparaging passive index investors, when study after study shows that to be unquestionably false.

Admittedly, my posts were probably unnecessary though as I believe a vast majority of the readers of this forum are aware this guy is full of more bullshit than a cattle ranch.

Have a great weekend!

[NoraLenderbee]

I generally see a forward trend similar to the 1970s unfolding.

Lord, I hope not. I couldn't stand the music, and I look terrible in earth tones.

[fb132]

I generally see a forward trend similar to the 1970s unfolding.

Lord, I hope not. I couldn't stand the music, and I look terrible in earth tones.

You think today's music is any better?

[Dicey]

Following. I have some (okay, a shitload of) cash parked and I'm not sure if it's time to move some into my balanced equities portfolio. Instead of deciding, I went shopping and bought lots of pretty dresses instead. On clearance, of course. I'll think about it some more next week.

[NoraLenderbee]

I generally see a forward trend similar to the 1970s unfolding.

Lord, I hope not. I couldn't stand the music, and I look terrible in earth tones.

You think today's music is any better?

I don't even listen to today's music. But I don't want to go back to disco or "Afternoon Delight."

[Dr. Pepper]

My point of view is that the markets have been moving down for several months now, but it's not reflected in the market indices, because they are cap weighted. A few large cap stocks had continued to move higher, ie FB, GOOG, LNKD, DIS and pull the averages up. Now that these are starting to correct down to reflect what had been happening with many other stocks, the media is starting to notice, because the DOW and SP 500 are showing negative returns. There has only been one period in history where valuations were stretched this thin by any metric (ie P/E, EV/EBITDA, P/S, Total Market Cap/GDP), and it was in 2000. I think the odds are in the US market we are fully valued, to slightly overvalued for many stocks, and the returns going forward are going to be either very small or negative.

[Bateaux]

My accounts are down over 50k already.   My reaction?   Since I'm still working.  BUY BUY BUY BUY BUY BUY