HomerJ wrote:Back when the S&P500 was at 1800, someone else pointed almost this exact same thing.... "I think the market has a bigger chance of a big correction than a small gain"... and he said he went 100% to cash...
He hasn't posted in a while... Very tough if the market goes up another 15% while you sit on the sidelines... then what? You don't want to get in then, because now you're even MORE sure a crash is due... but then the market goes up another 10%! Now you really don't know what to do!
I'm sure there were people back in 1996 when the DOW was at 6000 who got out after the DOW had tripled, waiting for the correction, and never again saw the DOW drop to 6000 again (although close in 2009)
Of course it's a risk. Which is why I'm only making the move with less than 10% of my investments.
Also, in 1996, the market had not just gone on a 7-year 160% return tear. Finally, as we all know now, the dot.com boom, a pretty enormous emerging catalyst, was starting to take place. Finally, geopolitically, the late 90's was the safest the world has ever been in my lifetime.
All I said was that I want to see how the market reacts to the (IMO inevitable) interest rate hikes. Also, I am not predicting doom or even a big crash. I simply said I think the market will tread water for a year, and that IF there is a biggish swing, it's more likely to be down than up.
If the market goes up, I'll be very happy as most of our money is still invested in stocks.
FWIW, when the rally was at 14k I thought the market might rest for a while, but resisted the temptation and stayed on at 100% stocks. Only when the market hit 16k did I think maybe I shouldn't be at 100% and moved to 85/15, which is reasonable and probably still a bit aggressive for my age. That's still where I am today.