It looks like you're new here. If you want to get involved, click one of these buttons!
Hedge-fund manager Carl Icahn says he is “very cautious” on U.S. stocks, which “could easily have a big drop” from their new record highs. Ben Inker, a director at asset manager GMO, forecasts that overall, U.S. stocks will suffer losses of 2% annually, counting dividends and inflation, through 2020. Yet billionaire investor extraordinaire Warren Buffett says the U.S. stock market is valued “in a zone of reasonableness.” So who is right?
© 2015 Mutual Fund Observer. All rights reserved.
© 2015 Mutual Fund Observer. All rights reserved. Powered by Vanilla
Comments
Ah, it must be awful to be famous like each of these guys so that the patronizing public hangs on your every word. Surely, these fellas get dressed the same way we do - one leg at a time - and probably have days when the world looks rosy and days when it looks rotten. I wouldn't put too much stock in their dribble-drabble.
Regards,
Ted
Stocks have had a good run much better than I first tought they would at the beginning of the year. With this, and just going into retirement, I am glad I took some profit on the way up and have built a sizeable cash position in doing so. Currently, I feel my portfolio is pretty much right sized from an asset allocation stand point at 20% cash, 25% income, 45% equity and 10% alternatives. Plus it has a yield distribution, on amount invested, north of five percent and then throw in some capital gains distributions from some ot the mutual funds and I am up there around six, seven, possibly eight percent this year on the total distribution factor. What a cash cow!
I think stocks are a little pricey at the moment to do any major buying and although I have been selective in what I have bought I have been a net seller thus far this year. I'd rather right size my portfolio in an updraft rather than try to do it in a down draft as many investors are seeking the exits. If it is right sized when the down draft comes one can then better concetrate on select buying opportunities while others are cutting out and selling.
Currently, Morginstar's Market Valuation Graph is showing stocks are currently selling at about a four to five percent premium. I like to buy when stocks are selling at a discount as they were about a year ago (five percent) and then sell some off when they are at a premium. Over the years, I have never made good money when buying at or near the top of a market; but, I certaintly have by buying when they were selling at a good discount and out of favor. Especially by buying the good dividend payers and holding them until they have rebounded and have beocme overbought and priced at premiums.
I have linked the graph for those that are interested. Click on the one year, or greater, time period(s) to view the market's oversold/overbought history.
http://www.morningstar.com/market-valuation/market-fair-value-graph.aspx
Have a grand weekend ... and, I wish all ... "Good Investing."
Old_Skeet
..."In fact, whether stocks are overvalued or fairly priced isn’t the question that investors should be asking. Instead, what you need to answer is this: How much can I stand to lose before I will bail out?
Experts can’t tell you that, but history and what’s in your own head can..."
Investor behavior: Same as it ever was
The financial crisis changed nothing, writes Vanguard's Fran Kinniry: Investors continue to chase returns, and have lately been jettisoning fixed income for stocks. Driven by the 4th greatest bull market on record - a cumulative return of 198% since the bottom - global equity allocation for investors has increased to 57% from 38%, and vs. the 20-year median of 51%.It's probably time for the typical investor (one with an equity-heavy portfolio) to maintain a prudent allocation by directing new cash flows into bonds, while selling stocks - the exact opposite of where money is flowing today."Rebalancing usually seems counterintuitive at the time when it promises to be most effective," says Finniry. "It can be difficult to implement from a behavioral standpoint and requires incredible discipline." With equities partying and the near-universal belief of higher interest rates on the way, who could blame an investor for not wanting to sell stocks and buy bonds."It is very common following significant gains in the equity markets for investors to question the benefits of rebalancing," but it's never "different this time;" instead it's the "same as it ever was."Broad fixed income ETFs: AGG, BOND, BND, BSV, BIV, BLV, SCHZ, LAG, SAGG, ILTB, ISTB, GBF, GVI, MINC, FWDB, GIYBroad equity ETFs: VTI, PRF, SCHB, USMV, VV, SCHX, ITOT, ONEQ, IYY, NYC, JKD, EXT, EQL, FVI, EUSA, EEH, SPXH, TRSK, FSE, FSU, PXLC, FWDD, TOTS, FNDB, ALTL
Link to full blog/article
http://vanguardadvisorsblog.com/2013/11/21/same-as-it-ever-was/