markets are heading up

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
voltron99
Posts: 5
Joined: Mon Nov 07, 2011 4:39 pm

markets are heading up

Post by voltron99 »

Hi, Quick question for you guys. I tend to be more of a value investor. This proved easy a few months ago when the dow was at 10k, everything was undervalued. Now, stocks seem to be approaching their fair market values. I have about 32k in a profit sharing 401k account (pre-tax) that is sitting around as cash. I'm uncertain if I should wait for the market to drop again and look for value in stocks....or should I be doing something else with it such as mReit or bond fund since its in a tax advantaged account. It seems like its easier to invest when the markets down, but I get gun shy when things are trending up and the deals aren't as good. Any thoughts? thanks!
BYUvol
Posts: 120
Joined: Sat Mar 24, 2012 3:06 pm
Location: KY

Re: markets are heading up

Post by BYUvol »

Value is in the eyes of the beholder. If you are going solely off of price/book or price/earnings, European bank stocks are a "value" right now.
User avatar
TomatoTomahto
Posts: 11867
Joined: Mon Apr 11, 2011 1:48 pm

Re: markets are heading up

Post by TomatoTomahto »

Two words: analysis paralysis. Just invest it now, according to your asset allocation. How much time/money have you lost while you waited? Perfect shouldn't be the enemy of good.
I get the FI part but not the RE part of FIRE.
yobria
Posts: 5978
Joined: Mon Feb 19, 2007 11:58 pm
Location: SF CA USA

Re: markets are heading up

Post by yobria »

The market's always fairly valued based on current information. You may think you can guess when it isn't, but then, you can also think you can win the Tour de France. It's easy to think stuff :) .
livesoft
Posts: 75087
Joined: Thu Mar 01, 2007 8:00 pm

Re: markets are heading up

Post by livesoft »

Asset allocation -> stocks:bonds ratio --> rebalance as needed.

Probably best is to invest to your desired asset allocation. That way ->

a) if equities tank, you can rebalance,
b) if equities head up, you can rebalance,
c) if equities do nothing, you are already in balance.
Wiki This signature message sponsored by sscritic: Learn to fish.
Xanadu
Posts: 250
Joined: Fri Sep 30, 2011 8:50 pm

Re: markets are heading up

Post by Xanadu »

Hello voltron. If you are looking for advice on timing the market, I believe you are on the wrong forum.

Bogleheads do not believe in timing the market. See here for an overview of the Boglehead philosophy. Notice number 4 is "never try to time the market".

Good luck.
Topic Author
voltron99
Posts: 5
Joined: Mon Nov 07, 2011 4:39 pm

Re: markets are heading up

Post by voltron99 »

Thanks for info everyone, appreciate it. So basically if I asset allocate properly I shouldnt be worried about market timing. As far as my allocation, I'm light on bonds, so I should probably invest into some bonds with this profit sharing money. Bond funds worry me with the interest rates being so low. I guess I could do a short term fund, but the returns are so low. I do keep some money in the vanguard tax exempt intermediate term bond fund in my taxable account, but are there any good suggestions for the tax efficient account as far as bond funds? And do you guys do individual bonds, or only bond funds? I'm 35, have around 100k invested, own a house, and income is around 500k a year. Not much debt other than med school at 180k consolidated at 2.8% year. thanks
letsgobobby
Posts: 12073
Joined: Fri Sep 18, 2009 1:10 am

Re: markets are heading up

Post by letsgobobby »

voltron99 wrote:Thanks for info everyone, appreciate it. So basically if I asset allocate properly I shouldnt be worried about market timing. As far as my allocation, I'm light on bonds, so I should probably invest into some bonds with this profit sharing money. Bond funds worry me with the interest rates being so low. I guess I could do a short term fund, but the returns are so low. I do keep some money in the vanguard tax exempt intermediate term bond fund in my taxable account, but are there any good suggestions for the tax efficient account as far as bond funds? And do you guys do individual bonds, or only bond funds? I'm 35, have around 100k invested, own a house, and income is around 500k a year. Not much debt other than med school at 180k consolidated at 2.8% year. thanks
I don't think it matters what you do with 10 days' pay, does it?

Have you read any of the Bogleheads recommended reading? Please consider posting in the preferred format linked at the top of the page for more comprehensive replies.
Fallible
Posts: 7692
Joined: Fri Nov 27, 2009 4:44 pm
Contact:

Re: markets are heading up

Post by Fallible »

voltron99 wrote:Thanks for info everyone, appreciate it. So basically if I asset allocate properly I shouldnt be worried about market timing. ...
You should never be worried about market timing except when you're trying to do it.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
User avatar
Toons
Posts: 13929
Joined: Fri Nov 21, 2008 10:20 am
Location: Hills of Tennessee

Re: markets are heading up

Post by Toons »

voltron99 wrote:Hi, Quick question for you guys. I tend to be more of a value investor. This proved easy a few months ago when the dow was at 10k, everything was undervalued. Now, stocks seem to be approaching their fair market values. I have about 32k in a profit sharing 401k account (pre-tax) that is sitting around as cash. I'm uncertain if I should wait for the market to drop again and look for value in stocks....or should I be doing something else with it such as mReit or bond fund since its in a tax advantaged account. It seems like its easier to invest when the markets down, but I get gun shy when things are trending up and the deals aren't as good. Any thoughts? thanks!
I would invest the 32k in the Total Stock Market and let it work for me
for decades. :happy . Time not timing
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
User avatar
bogleblitz
Posts: 477
Joined: Mon Oct 01, 2012 2:51 pm

Re: markets are heading up

Post by bogleblitz »

I am in the exact situation as OP. I also think stocks are at all time high according to S&P 500 index. Also afraid to do bonds because low interest rate.

Since I'm a conservative person, I'll do 60/40 aa.
Xanadu
Posts: 250
Joined: Fri Sep 30, 2011 8:50 pm

Re: markets are heading up

Post by Xanadu »

bogleblitz wrote:I am in the exact situation as OP. I also think stocks are at all time high according to S&P 500 index. Also afraid to do bonds because low interest rate.

Since I'm a conservative person, I'll do 60/40 aa.
stocks are NOT at an all-time high relative to earnings. They are much much lower compared to just before the dot com bubble. you are also not taking into consideration inflation.

Shiller PE Ratio:Image
Post Reply