YogurtRunner wrote: ↑
Wed Oct 02, 2019 5:57 pm
HomerJ wrote: ↑
Wed Oct 02, 2019 1:34 pm
A 50% run-up would be missed, and it might happen before the next 20% or more drop.
I'm just curious as to where you eternal optimism stems from? We have had an outstanding year until recently and yet nothing in my portfolio has, to my knowledge, experienced a "50% run up." A couple of notable funds were hovering at 24% YTD until the recent unpleasantness and though I have not looked, I suspect those gains will all be gone by the end of the year in the same fashion as took place last year because that appears to be the "new game" where insiders are making their wealth at the expense of buy and holders who are now some 60% of the all indexes and are thus sheep ripe for the shearing. If I am saying anything too far out of line, please correct me, I am all ears. And yes, I am mostly one of those sheep, but I do have horns.
I never said 50% in one year.
In 1996, valuations were the highest they had ever been since the Great Depression. The Chairman of the Federal Reserve himself talked about "irrational exuberance", how the market was irrationally too high and due for a crash.
Anyone who got out, waiting for a correction had to watch the market grow 110% over the next 4 years, and even when the dot-com crash happened, prices never got as low as 1996.
1996 was an excellent time to buy, even though all the indicators said otherwise.
We just don't know.
The market could indeed start a 20% crash tomorrow. It could also start a 50% runup first. We just don't know.
I am absolutely NOT an "eternal optimist". I prepare myself for 50% crash starting tomorrow. Because it might happen. So I have a conservative Asset Allocation (50/50 at age 50). I can afford to lose (hopefully temporarily) 25% of my portfolio.
But I recognize that I can't predict the future, and no one else can either. So I would never go 100/0 or 0/100, because I don't know what's going to happen next. We just don't know.