We all learn and grow as we go. Thanks for sharing your perspective.gmaynardkrebs wrote: ↑Mon Apr 15, 2019 9:37 amYes, there is a degree of inconsistency between my "theory and praxis" as Karl Marx would say. Our implementation isn't that different. However, I think looking at valuation is a smarter way to invest than the way I did it. Nobody was talking about that when I set on my path many years ago. I would do things differently knowing what I know now. Saying this seems odd, because I would have less money today had I followed my present advice. However, over time I have developed a very negative view of Wall Street and the mutual fund industry. (Vanguard in the exception.) Their business model is built almost entirely on hiding tail risk from average investors like myself. The most obvious example of this is getting people to invest in stocks at much higher allocations than they should. Honestly, I think folks at my age (and yours) were very lucky to have been investing in the era we did.marcopolo wrote: ↑Mon Apr 15, 2019 8:25 am
While our belief in how actionable are current valuations may be different, it seems to me we are splitting hairs when it comes to actual implementation.
You use "age in bonds", so at ~age 70, you have 30% equities. So, despite your worries about current valuations, you don't seem to have let that actually affect your glide path (that does seem curious given how strongly you seem to feel about valuations). I am in my early 50s, and am maintaining a 60/40 AA, so not that far off from what age in bonds would dictate. While I can see the argument that high valuations probably means lower expected returns going forward, I don't see how i can use that in any actionable way to time the market, other than to plan on lower growth of my portfolio, which I am doing anyway.
I am not sure how lucky or exceptional we have been. I went through the tech wreck and the great recession in my investing lifetime, you probably also endured Black Monday in addition. Does not seem like it has been a particularly lucky (or unlucky) ride. That is the nature of the equity markets, you take the good with the bad, and hopefully, over the long run you come out ahead. There are no guarantees. Maybe if you are lucky, you can avoid some of the excesses. Like i have said before, I don't think I am smart enough to do that, so i mostly just go along for the ride.
Appreciate your insights, always good to have healthy discussions to flesh out one's thoughts