If you're past FIRE, it's great. If you're a few years out like me, it isn't a good thing.
I was kind of hoping we would see a correction this year, so I wouldn't be tempted to punch out early.
Of course, I've been hoping that since the 2013 spike, so I probably shouldn't complain.
At a certain point you're going to just be good to go. It would be nice to see you're still there even after a pull-back, though.
yeah i really want to see a good dip for 2 reasons:
1. i'm still buying so all that money can get in at a better price
2. i started full time work in 2010 i havent lived thru a large drawback just want to see what it does to me emotionally.
I definitely agree with number 2. I need to see a drop before I fire just so that I know I can handle loosing $200k and stay the course. If I can't, I'd like to know that before I fire.
I know it wasn't exactly a crash, but I was doing a little happy dance back in February. Then it went back up :( At least it's good for everybody here that's already pulled the plug.
Just checked VTSAX for it's gain this year.
It's up about 12% plus another 1.82% of dividends.
If you had your $1M in VTSAX and spent $40,000,
your portfolio still has and extra $90,000.
May the good times continue.
Don't forget the most important rule of investing: Gains are meaningless on securities that are held.
Easy come, easy go.
This applies to losses as well, but too many people look at a good period like YTD and think "look at all that money I have made!" but unless you sell NOW, you've 'made' nothing.
I wish people would stop talking about "money" when they refer to stocks. It's not money, it's equity. You don't actually have any money. If the market takes a dive, you've still got the same number of shares. I know it's just semantics, but it's a semantic misconception that really affects the way people react.
The CAPE (Cyclically Adjusted Price to Earnings) ratio is at 28 though. About what it was at before the recession.
Regular PE on the S&P is 26. Well above it's historic average of around 15.
That's what I'm interested to see. I expect the drop with the CAPE so high, but I also wonder if some of the large changes in the system over the last decade have made CAPE no longer valid (or, perhaps still valid, but the baseline may be different).
Yes, I think some accounting changes had some effects, but interest rates have been super low for a while. Stocks had to go way up for risk premiums to revert to their mean. Interest rates are going back, up though, so it will be interesting to see how that plays out. I guess the market is still going up because it sees interest rates as a sign the economy is taking off. I personally think there will be a "correction," but I mean that in a much vaguer sense than most people. The market may correct itself with a crash, but it also might correct itself with a rise in earnings, inflation, or something else I can't predict. And as we've seen over the past couple of years, nobody knows what the timing of that will be.