Invite ye felawes and frendes desirous in gold to enter the gates of Shrewd'm, for they will thanke ye later.
- Manlobbi
Personal Finance Topics / Macroeconomic Trends and Risks
No. of Recommendations: 2
No. of Recommendations: 2
luxmain asked in August
If you're long the market right now, I have to ask - where's the upside?
Where the upside was is obvious now - it was in the market. The market is up about 6% in the 4 months since this post was written. That's why I was long the market back then, why I'm still long now, and have been for decades.
Of course, quoting a 4-month return is meaningless, and I'm not trying to pick on you. Investors' time frames should be measured in periods of at least 3 years, preferably 5 or 10 years. My point is that trying to time the market based on some sort of valuation argument is futile.
No. of Recommendations: 6
The market is up about 6% in the 4 months since this post was written. That's why I was long the market back then, why I'm still long now, and have been for decades.
Of course, quoting a 4-month return is meaningless, and I'm not trying to pick on you. Investors' time frames should be measured in periods of at least 3 years, preferably 5 or 10 years. My point is that trying to time the market based on some sort of valuation argument is futile.
A little early to be declaring victory. There have been (and will be in the future) long periods of low returns in the stock market - these typically (always?) start from a period of high valuation and end with a period of low valuation (by definition?).
Is your argument that we are not in a period of high valuation? Or that this high valuation period will continue indefinitely? Or that it is not possible to identify when such periods start and end? Or even that measuring valuation is not possible?
tecmo
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No. of Recommendations: 3
There have been (and will be in the future) long periods of low returns in the stock market - these typically (always?) start from a period of high valuation and end with a period of low valuation (by definition?).
Along these same lines, I have been revisiting how long the market tends to trade under peak price and I found the following quite interesting. Today, December 15th, I believe will mark 490 days since the S&P500 closed at its all time peak of 4796 on January 3, 2022. I only find five stretches longer than that since 1955.
09/23/1958: 538 days peak to peak
03/03/1972: 819 days
07/16/1980: 1897 days
05/29/2007: 1802 days
03/27/2013: 1375 days
Maybe we see a new peak before year end. Maybe we don’t. I don’t find it comforting that current conditions share any similarity to the time frames above. I remember the most recent two very vividly.
Jeff
