What's that smell?

[3funder]

Bogleheads,

Let me first say that I have no plans to change my asset allocation (three-fund portfolio, in case it wasn't obvious); however, I wake up every morning to the terrible odor of overpriced US stocks and low bond yields. It offends my olfactory senses and makes me want to invest all my money in international stocks (again -- I'd never do that). Anyone else starting to feel like doodoo every time they find themselves investing in US stocks and bonds as part of their perfectly reasonable overall AA?

3funder

[Sandtrap]

Sometimes I do get a twinge (scent) of apprehension.
But it passes, unlike the overpowering lingering waft of someone needing a shower, or doused with "man perfume spray" in the aisle at Walmart.

The incredible value of the forum is mutual encouragement to "stay the course".
Actionably, when the "scent" of apprehension arises, read the forum for whatever is on one's mind to get back on track.
j

[Taylor Larimore]

Bogleheads,

Let me first say that I have no plans to change my asset allocation (three-fund portfolio, in case it wasn't obvious); however, I wake up every morning to the terrible odor of overpriced US stocks and low bond yields. It offends my olfactory senses and makes me want to invest all my money in international stocks (again -- I'd never do that). Anyone else starting to feel like doodoo every time they find themselves investing in US stocks and bonds as part of their perfectly reasonable overall AA?

3funder

3funder:

A diversified portfolio should always have underperforming elements.

Stay the course.

Best wishes.
Taylor

[bloom2708]

After every "whiff" or "sniff" or "feeling" or "quiver", revert back to:

Nobody knows nothing.

Stay the course.

[H-Town]

Yeah.. but I don't and probably won't go 100% international.

I keep my portfolio well diversified. It already includes international equity and emerging markets, etc. I've been buying and rebalancing international stock at a discount for the past 8 years... We'll see how it will fall out in the next decade.

[gmaynardkrebs]

Bogleheads,

Let me first say that I have no plans to change my asset allocation (three-fund portfolio, in case it wasn't obvious); however, I wake up every morning to the terrible odor of overpriced US stocks and low bond yields. It offends my olfactory senses and makes me want to invest all my money in international stocks (again -- I'd never do that). Anyone else starting to feel like doodoo every time they find themselves investing in US stocks and bonds as part of their perfectly reasonable overall AA?

3funder

The mammalian olfactory system, though primitive, is a highly underrated guide to survival in an often confusing and hostile world. It should not be totally relied upon, but it should never be ignored.

[ionball]

Smells better than not having money to invest. Commit to an allocation and forge ahead as planned.

[chevca]

Nope, I don't get that feeling at all. I'm just glad to have money to save and invest. Could be worse.

[livesoft]

I thought this was going to be a rat poison thread.

But everything looks good to me mostly because everything is below their highs YTD. Yes, that doesn't mean that things won't plummet from here, but it also doesn't mean that things won't go up from here. What it does mean though is that buying today is not buying at an all-time market high.

Intra-day volatility, that is the percent differences between high and low prices of the day, is something else again.

[LRonHalfelven]

I love the smell of capital gains in the morning. Smells like... victory.

[radiowave]

Actually, with a retirement window 5-7 years from now, I'm hoping for a recession sooner than later so we can get through it and I can retire on the way back up. My apologies to those who are closer to retirement.

[2015]

But of course I smell the strong odor of B.S. Sometimes it smells like overconfidence, consistency, or confirmation bias. Or maybe it smells of fallacy of numbers or false narratives bias. Other times it's just plain old appeal to authority, likeability, social proof, or herd mentality bias. Or it could be recency/availability, sample, or scarcity bias (along with a host of others). I smell it every single time I read a post where someone claims to understand/predict/forecast a complex adaptive system, which is exactly what the stock market (and all of its elements) is. A 3 fund PF is a perfect candidate for more productive endeavors, such as minimizing fees and taxes.

[Gamma Ray]

t offends my olfactory senses and makes me want to invest all my money in international stocks (again -- I'd never do that). Anyone else starting to feel like doodoo every time they find themselves investing in US stocks and bonds as part of their perfectly reasonable overall AA?

Don't you have any international stocks in you AA at all? I am not sure if your 3 fund portfolio is strictly domestic, but from what I learned here, we definitely want to keep some in international. We've been seeing target funds raise the international assets year after year. That was surprising to me but it's been OK so far.

Nobody knows nothing.

Motto, and right it is!

[Watty]

You should be more concerned when you wake up and everything looks wonderful.

Everyone else probably feels that way too and things will get ugly when the herd changes directions.

[onthecusp]

I'm within a year or so of retirement and a little dip continuation would not bother me at all. I don't think a recession is good for anyone. My saving rate is sky high right now and it has to last 30 years. I'm also a believer in the "4% rule or maybe higher after a dip" such as the Kitces article that is often linked. Once SS kicks in fully for me I should be well below 4% anyway.

I've had trouble buying enough bonds to keep my AA in check so the recent dip just makes it look like I'm making better progress there. It is a little frustrating that I'm not buying the dip in stocks but I realize that is my old market timing instincts bubbling up so I try and ignore that frustration and stay the course towards more bonds with discretionary buys.

[itstoomuch]

Not bad a bad smell.
Have you ever lived on a farm?
YNoseMV

[gmaynardkrebs]

I'm within a year or so of retirement and a little dip continuation would not bother me at all. I don't think a recession is good for anyone. My saving rate is sky high right now and it has to last 30 years. I'm also a believer in the "4% rule or maybe higher after a dip" such as the Kitces article that is often linked. Once SS kicks in fully for me I should be well below 4% anyway.

I've had trouble buying enough bonds to keep my AA in check so the recent dip just makes it look like I'm making better progress there. It is a little frustrating that I'm not buying the dip in stocks but I realize that is my old market timing instincts bubbling up so I try and ignore that frustration and stay the course towards more bonds with discretionary buys.

I wonder how much safer bonds are today than stocks? Maybe more cash or very short bonds would be safer?

[Sandtrap]

Not bad a bad smell.
Have you ever lived on a farm?
YNoseMV

Grew up on a dairy farm next to a pig farm.
City friends came once and complained about the smell.
I said.
"What smell">?
. . . to farmers.. . it's the smell of money.. . .
j

[itstoomuch]

^

[tenkuky]

I love the smell of capital gains in the morning. Smells like... victory.

"You smell that? What is that?"
"Opportunity?"
"No... money! I smell money"

[onthecusp]

I'm within a year or so of retirement and a little dip continuation would not bother me at all. I don't think a recession is good for anyone. My saving rate is sky high right now and it has to last 30 years. I'm also a believer in the "4% rule or maybe higher after a dip" such as the Kitces article that is often linked. Once SS kicks in fully for me I should be well below 4% anyway.

I've had trouble buying enough bonds to keep my AA in check so the recent dip just makes it look like I'm making better progress there. It is a little frustrating that I'm not buying the dip in stocks but I realize that is my old market timing instincts bubbling up so I try and ignore that frustration and stay the course towards more bonds with discretionary buys.

I wonder how much safer bonds are today than stocks? Maybe more cash or very short bonds would be safer?

Bonds have not felt very safe over the past year. That said I have not lost much on them. Since I started buying them (about 60/40 intermediate /short term treasury bond funds) I've lost an amount similar to the daily swings in my overall portfolio. I'm new to bonds, very late in my investing life. I first bought at about the worst possible time - about 18 months ago. I'm a believer in the stability they produce. And yet with my latest new money my market timing tendencies are still strong and I'm holding a bit of cash as I wait for bonds to drop more.

[123]

A few months ago I began moving from a 3 or 4 fund portfolio to a Vanguard LifeStrategy fund-of-funds in a couple of accounts. Sure the expense ratio is higher and it's got those international bonds I'm not really into but otherwise it's a good fit for us, it's automatic rebalancing, painless, and easy for my survivors to manage as well. There might be other fund-of-funds that have a asset allocation that works for you. Yeah, it's not a great plan but it's a good plan, and, as Taylor Larimore has told us, sometimes the search for a perfect plan causes us to ignore a good plan.

[FIREchief]

Why do you think US stocks are overpriced? Worldwide economies are getting stronger and US corporate earnings are rising rapidly.

[Milo Bloom]

3funder:

A diversified portfolio should always have underperforming elements.

Stay the course.

Best wishes.
Taylor

Taylor,

Thanks for pointing this out. I had never considered that this should be the case.

Hope all is well.

[3funder]

t offends my olfactory senses and makes me want to invest all my money in international stocks (again -- I'd never do that). Anyone else starting to feel like doodoo every time they find themselves investing in US stocks and bonds as part of their perfectly reasonable overall AA?

Don't you have any international stocks in you AA at all? I am not sure if your 3 fund portfolio is strictly domestic, but from what I learned here, we definitely want to keep some in international. We've been seeing target funds raise the international assets year after year. That was surprising to me but it's been OK so far.

Nobody knows nothing.

Motto, and right it is!

My international stock allocation is 40% of equities. I just hate the fact that US stocks are so expensive, even though I hold plenty of international. I have no plans to change my portfolio; I'm just venting.

[Scott S]

Sometimes staying the course requires holding your nose.

[Gamma Ray]

VG doesn't give details on Int'l vs Domestic anywhere in portfolio information, right? I only see stocks vs bonds, nothing on int'l vs domestic.
I remember someone linked to a website we could put our funds and analyze them all in one picture (you could put cash etc.. as well), does anyone remember what that site was?

Hmm, found it in my bookmarks:
https://www.portfoliovisualizer.com/backtest-portfolio

[MJW]

Even if we accept the premise that US equities are likely to underperform their historical average for a time, why must it automatically follow that international equities are going to perform significantly better? Because they are priced more attractively? Perhaps, but they still have to deliver. I hold non-US equities like many of you, but I do so for pragmatic reasons and don't have the same confidence in them that is seemingly held by many here.

[Zero Alpha]

Hopefully it is bull doodoo. All of the current pessimism makes me believe there could still be a lot of upside for stocks in the sort term.

Stay the course.

[groovy9]

Bogleheads,

Let me first say that I have no plans to change my asset allocation (three-fund portfolio, in case it wasn't obvious); however, I wake up every morning to the terrible odor of overpriced US stocks and low bond yields. It offends my olfactory senses and makes me want to invest all my money in international stocks (again -- I'd never do that). Anyone else starting to feel like doodoo every time they find themselves investing in US stocks and bonds as part of their perfectly reasonable overall AA?

3funder

There's a post around here somewhere (or maybe on Reddit) where someone compiled examples of people claiming stocks were overpriced at almost every $1000 increment as the Dow rose from $7k to today.

Rest assured, you'll almost always be wrong when you have this feeling. You'll occasionally be right, but acting on the assumption that you're right is just about the most costly thing you could do.

[nisiprius]

...Nobody knows nothing...

Nobody nose nothing.

[LeisureLee]

When the market is at new highs and rising, I feel good about how my existing investments have grown and my safe withdrawal amount has increased.

When the market is down I feel good that I'm getting future income at a discount and that I don't have to sell at reduced prices.

I like my "glass half full" glasses better than the alternative. =)

[EnjoyIt]

Bogleheads,

Let me first say that I have no plans to change my asset allocation (three-fund portfolio, in case it wasn't obvious); however, I wake up every morning to the terrible odor of overpriced US stocks and low bond yields. It offends my olfactory senses and makes me want to invest all my money in international stocks (again -- I'd never do that). Anyone else starting to feel like doodoo every time they find themselves investing in US stocks and bonds as part of their perfectly reasonable overall AA?

3funder

3funder:

A diversified portfolio should always have underperforming elements.

Stay the course.

Best wishes.
Taylor

Taylor,
That is such a perfect response. I will quote you when talking to friends and colleagues on this subject.

Thanks,
Ei

[peterinjapan]

I wonder how much safer bonds are today than stocks? Maybe more cash or very short bonds would be safer?

I'm having trouble pulling the trigger on more bonds (I only have like 7%), since they're guaranteed to go nowhere, if not fall. I know the reason to hold bonds, I just can't keep looking or alternatives, like super solid REITs (O/STOR). Am I crazy?

[StevieG72]

We can be a nervous bunch on this forum.

Stocks are doing well, the bottom must be getting ready to fall out.

Stocks are tanking, the world is coming to an end as we know it.

We are the Goldilocks of investors! Market is up? Too hot!
Market is down? Too cold!

Stay the course? Just right!

[3funder]

Bogleheads,

Let me first say that I have no plans to change my asset allocation (three-fund portfolio, in case it wasn't obvious); however, I wake up every morning to the terrible odor of overpriced US stocks and low bond yields. It offends my olfactory senses and makes me want to invest all my money in international stocks (again -- I'd never do that). Anyone else starting to feel like doodoo every time they find themselves investing in US stocks and bonds as part of their perfectly reasonable overall AA?

3funder

There's a post around here somewhere (or maybe on Reddit) where someone compiled examples of people claiming stocks were overpriced at almost every $1000 increment as the Dow rose from $7k to today.

Rest assured, you'll almost always be wrong when you have this feeling. You'll occasionally be right, but acting on the assumption that you're right is just about the most costly thing you could do.

No worries -- not taking any action. Just annoyed.

[midareff]

Bogleheads,

Let me first say that I have no plans to change my asset allocation (three-fund portfolio, in case it wasn't obvious); however, I wake up every morning to the terrible odor of overpriced US stocks and low bond yields. It offends my olfactory senses and makes me want to invest all my money in international stocks (again -- I'd never do that). Anyone else starting to feel like doodoo every time they find themselves investing in US stocks and bonds as part of their perfectly reasonable overall AA?

3funder

I just feel it is what it is and try not to make any value judgements. I'm 70, retired, conservative and my AA reflects that. 44/53/3, equities/FI/cash. Which ever way the market goes I'll be just fine so why even bother to think about it.

[oriol]

Aaaaaaand it's official, we have topped. /s

Ed Seykota always joked about reading the news. He brought in headlines from right before big rallies or crashes. The audience would read the title (which was always the opposite of the move) and he'd say that's all the news you need to read. Just the title. Max stupid = trouble.

[Candor]

The nose knows nothing.

[MJW]

Hey OP, maybe you are actually just smelling the same thing as this forum member:

viewtopic.php?f=11&t=243788

....or maybe that person is smelling overpriced US equities and low bond yields as well. Either way, it could be mystery solved for one of you.

[Johnnie]

Actually, with a retirement window 5-7 years from now, I'm hoping for a recession sooner than later so we can get through it and I can retire on the way back up. My apologies to those who are closer to retirement.

Three years out. I sympathize, but make it snappy, would ya?

~~~~~~~~~~~

To the OP: Isn't "invest all my money in international stocks" kind of a false choice? Why not invest 30, 40 or 50 percent of your equties in internationals?

I'm 40 percent international and also 40 percent value; I also catch bad odors but much less of the overvalued US market one.

[naha66]

Not bad a bad smell.
Have you ever lived on a farm?
YNoseMV

Grew up on a dairy farm next to a pig farm.
City friends came once and complained about the smell.
I said.
"What smell">?
. . . to farmers.. . it's the smell of money.. . .
j

Branch manger and I were taking a new sales rep right out school out to a paper mill in Maine. we were just about there when he started complaining about the smell. Branch manger rolled down his window and said smell the money, oh and he liked pickled eggs too.