Second: I have been agreeing with the general thrust of this post for most of the past 20 years. So I've been under-invested in stocks, and emphasized value over growth, much to my detriment.

Even if ones agrees that stocks are significantly overvalued, it is not a logical conclusion to have a low allocation to stocks. It, instead, merely implies that the expected return should be much lower than starting from a period without this overvaluation. The distinction is important.

Reducing one's allocation usually assumes entry at a lower quote, which is difficult to do for quite separate reasons: (1) [regarding missing out] The tide continues to rise, even whilst the waves are moving up and down - so the lower quote may never occur, and (2) [regarding not getting back in] even if you wait for lower quote and successfully observe it, you are prone to continue to stay out of the market in anticipation that the quote still hasn't fallen enough. The latter occurs more than one expects especially given that the news stories are worse during such a future period of lower quotes.

- Manlobbi