Market feels very overvalued--go to cash for a while?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I agree with you OP

What's more likely. S&P to gain 30%, or to lose 30%.
The risks is exponentially higher the market will drop.
I piled a ton of $ into S&P in April when it was under 5000. It's seen an almost 30% rise. I'll be selling at the first sign of distress and stick it back into what at that time will probably be 3.5% money market until after the correction again. Locking in a profit is never bad.

You can be a sheepie and follow the axiom not to pull out of the market because it will recover. Pull up the long term graph and you'll see some of those recoveries took 15 years.

In the short term I agree this is a good time to be selling. Market is overvalued. I just cashed out a few hundred k to put down on a house in the next year.

Do you have a lot of taxes to pay on that few hundred k?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I agree with you OP

What's more likely. S&P to gain 30%, or to lose 30%.
The risks is exponentially higher the market will drop.
I piled a ton of $ into S&P in April when it was under 5000. It's seen an almost 30% rise. I'll be selling at the first sign of distress and stick it back into what at that time will probably be 3.5% money market until after the correction again. Locking in a profit is never bad.

You can be a sheepie and follow the axiom not to pull out of the market because it will recover. Pull up the long term graph and you'll see some of those recoveries took 15 years.

Looks like you answered your own question. Good luck with your market timing.

I don't understand why people assume the market will never have an extended, extensive decline or a crash. You are not required to lose your money in a crash, and not all can ride out an extended, steep decline. At some point you will need the money unexpectedly or expectedly, which requires you to pull it out.

[Anonymous]

Go look at the bogleheads forum if you want a more nuanced answer to your question

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I agree with you OP

What's more likely. S&P to gain 30%, or to lose 30%.
The risks is exponentially higher the market will drop.
I piled a ton of $ into S&P in April when it was under 5000. It's seen an almost 30% rise. I'll be selling at the first sign of distress and stick it back into what at that time will probably be 3.5% money market until after the correction again. Locking in a profit is never bad.

You can be a sheepie and follow the axiom not to pull out of the market because it will recover. Pull up the long term graph and you'll see some of those recoveries took 15 years.

In the short term I agree this is a good time to be selling. Market is overvalued. I just cashed out a few hundred k to put down on a house in the next year.

Do you have a lot of taxes to pay on that few hundred k?

I cashed out the most recent buys (have different stacks of ETF’s) so not as much as it could be. Still made way more than if I kept it all in cash

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I agree with you OP

What's more likely. S&P to gain 30%, or to lose 30%.
The risks is exponentially higher the market will drop.
I piled a ton of $ into S&P in April when it was under 5000. It's seen an almost 30% rise. I'll be selling at the first sign of distress and stick it back into what at that time will probably be 3.5% money market until after the correction again. Locking in a profit is never bad.

You can be a sheepie and follow the axiom not to pull out of the market because it will recover. Pull up the long term graph and you'll see some of those recoveries took 15 years.

Looks like you answered your own question. Good luck with your market timing.

I don't understand why people assume the market will never have an extended, extensive decline or a crash. You are not required to lose your money in a crash, and not all can ride out an extended, steep decline. At some point you will need the money unexpectedly or expectedly, which requires you to pull it out.

Assuming the market will crash at X date is just as pointless as assuming it will never crash. If you take your money out too soon you’ll miss out on gains. People have been betting on an S&P 500 crash since it was in the low 2000’s. Would suck to be one of them!

[Anonymous]

Not sure I agree -- I do see a correction out there although I put it well into 2026. But the fundamentals are quite strong. Also looking at a 20% plus increase before the correction.

If you could time it you would make a fortune. But in all likelihood you will mistime it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I agree with you OP

What's more likely. S&P to gain 30%, or to lose 30%.
The risks is exponentially higher the market will drop.
I piled a ton of $ into S&P in April when it was under 5000. It's seen an almost 30% rise. I'll be selling at the first sign of distress and stick it back into what at that time will probably be 3.5% money market until after the correction again. Locking in a profit is never bad.

You can be a sheepie and follow the axiom not to pull out of the market because it will recover. Pull up the long term graph and you'll see some of those recoveries took 15 years.

Looks like you answered your own question. Good luck with your market timing.

I don't understand why people assume the market will never have an extended, extensive decline or a crash. You are not required to lose your money in a crash, and not all can ride out an extended, steep decline. At some point you will need the money unexpectedly or expectedly, which requires you to pull it out.

That's why you have bonds or just reduce your withdrawal rate.

[Anonymous]

Well the Fed will just be cronies by the end of the year. OP probably onto something here.

[Anonymous]

I'd wait until the fed lowers interest rates

[Anonymous]

I moved half my equities into international funds.

[Anonymous]

Cash doesn't hedge against inflation.

[Anonymous]

Anonymous wrote:I moved half my equities into international funds.

Similar - this presidency did make me rethink my allocation and realize that I was too heavily indexed to US-only equities, so I rebalanced.

[Anonymous]

Anonymous wrote:If the market can stay high through covid unemployment then it's going to stay high all through this administration. Even if the national guard starts torching derelict buildings.

Money printing will go in high gear soon. Where do you think the money is going to go? Stocks and other hard assets ofcourse.
Everybody get in cash now and hold on to it, because they don't make more of it from thin air you know.

[Anonymous]

Why all cash? Just buy GLD etf instead for the short term and get some appreciation and then sell it when stocks have crashed and buy more SPMO or whatever stocks you like when they are cheap.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I moved half my equities into international funds.

Similar - this presidency did make me rethink my allocation and realize that I was too heavily indexed to US-only equities, so I rebalanced.

Most US companies are global companies.