Does anyone think the stock market is overvalued?

Enjoy the good life · Post by **Enjoy the good life** » Sun Mar 27, 2016 7:15 pm

Hi all,
Just working on my retirement stock portfolio.....in my tax advantages plan. I have received a lot of help from these wonderful people on this site with help in getting my asset selections correct and managing my own pension profit sharing plan. I plan to use 2 funds--- Fidelity Spartan Advantage Total Stock Market Index Fund and Fidelity Spartan Advantage Total Bond Market Index Fund. I wish to be 60/40 stocks/bonds since I am 51 years old. I plan on holding some cash as well in this account for buying stocks on the dips occasionally. I have read a lot and asked many questions on this site. My question tonight---does anyone believe that the stock market is overvalued/overbought at this point? Any thoughts of a correction happening in next few months? I know the bogleheads philosophy is not to try and time the market and to DCA whenever possible. Just wanted to ask since I plan on investing a large sum of money in the stock market soon. Thanks!!

WhyNotUs · Post by **WhyNotUs** » Sun Mar 27, 2016 7:21 pm

Yes, no, maybe. Seriously we know by historical mean that the P:E looks a little high but if/when it will go down or set a new normal, or go up another 10% is beyond the comprehension of people who are not selling advice.

livesoft · Post by **livesoft** » Sun Mar 27, 2016 7:25 pm

Did you notice the last correction which occurred last month? I'm curious.

I suppose it is possible that there will be another correction just a month or two after the last one, but you do know that recent growth numbers (not projected) were just revised upwards.

dharrythomas · Post by **dharrythomas** » Sun Mar 27, 2016 7:28 pm

I've thought the market was overvalued for most of the last 32 years.

We've been involved in regular stock investing through mutual funds for the last 29 years. If you try to time the market, you'll probably guess wrong. If you stay out now, when do you get back in?
The markets have never come back to close to what I thought was a reasonable valuation when we got started. Good luck.

Enjoy the good life · Post by **Enjoy the good life** » Sun Mar 27, 2016 7:33 pm

Hi all,
I plan on using index funds for my pension profit sharing plan which is currently in a money market fund since I left my financial advisor. He was underperforming the index funds every year for 7 years. I paid about $5,000/year for advice/investing into many mutual funds. I therefore had to cash out and am starting with index funds and plan on DCA investing into stock index fund and bond index fund over next 6--12 months. Every month a certain amount will go into each fund. My taxable fund is at Vanguard, where I hold VTSMX and Vanguard intermediate term tax exempt muni bond fund because I am at the highest tax bracket. Also some cash in money market fund at Vanguard. Nothing sexy or world shattering. Just a little DCA at a time. I am just a little nervous even though I have read much and asked many questions on this site and of others. Have been planning this for months and have been educating myself for years but have intensified my reading over last several months. Thanks!

KlangFool · Post by **KlangFool** » Sun Mar 27, 2016 7:35 pm

OP,

According to who? Why does this matters? Overvalued as compared to what?

Let's say you are a foreign investor with a lot of money (liquidity), where do you invest now?

Europe? China? India? Latin America? Japan? South Korea?

After going through the whole list, it looks like US stock market is a safer and better choice. How much of this kind of money are we talking about here? Is it big enough to offset US investor that think US stock market is overvalued?

We do not know.

It is a complex system with many parts. We do not know how much influence that each part has. For anyone that can predict the movement for any short period of time, he/she will be rich.

KlangFool

triceratop · Post by **triceratop** » Sun Mar 27, 2016 7:54 pm

If there are people buying in tomorrow's market, then there must be people selling. So, yes, some people do think the stock market is overvalued.

What that means for future returns, is, of course, anyone's guess.

2b2 · Post by **2b2** » Sun Mar 27, 2016 7:59 pm

Here's my prediction:

You won't get any replies to your question that will make it any easier for you to predict the future movement of the markets.

2b2

orca91 · Post by **orca91** » Sun Mar 27, 2016 8:02 pm

Enjoy the good life wrote:Hi all,
I plan on using index funds for my pension profit sharing plan which is currently in a money market fund since I left my financial advisor. He was underperforming the index funds every year for 7 years. I paid about $5,000/year for advice/investing into many mutual funds. I therefore had to cash out and am starting with index funds and plan on DCA investing into stock index fund and bond index fund over next 6--12 months.

When exactly did you leave your advisor?

I'm guessing you were invested, or held stocks/stock funds until very recently. If that is the case, I don't see it as you are starting out now. You are simply moving from probably active managed to index funds. You were likely invested in stocks before, so get back in there.

letsgobobby · Post by **letsgobobby** » Sun Mar 27, 2016 8:05 pm

it's overvalued, but not by a ton. stay the course.

triceratop · Post by **triceratop** » Sun Mar 27, 2016 8:09 pm

letsgobobby wrote:it's overvalued, but not by a ton. stay the course.

Specifically, your prediction is that it is 18.53% overvalued, correct? (1 - 1658.74/2035.94)

nisiprius · Post by **nisiprius** » Sun Mar 27, 2016 8:32 pm

Enjoy the good life wrote:Hi all,
Just working on my retirement stock portfolio.....in my tax advantages plan. I have received a lot of help from these wonderful people on this site with help in getting my asset selections correct and managing my own pension profit sharing plan. I plan to use 2 funds--- Fidelity Spartan Advantage Total Stock Market Index Fund and Fidelity Spartan Advantage Total Bond Market Index Fund. I wish to be 60/40 stocks/bonds since I am 51 years old. I plan on holding some cash as well in this account for buying stocks on the dips occasionally. I have read a lot and asked many questions on this site. My question tonight---does anyone believe that the stock market is overvalued/overbought at this point? Any thoughts of a correction happening in next few months?
I know the Bogleheads philosophy is not to try and time the market and to DCA whenever possible.
Just wanted to ask since I plan on investing a large sum of money in the stock market soon. Thanks!!

I will go so far to say that, personally, when I've had to do something like this I have actually set up an automatic transfer to transfer make the purchase in four equal purchases spaced a week or so apart. That reduces the effect of the actual day-to-day fluctuations. Obviously I think this is a good idea, and my rationale is that it cuts the standard deviation about in half, but if you assume (say) 10%/year returns, then delaying the purchase an average of 1.5 weeks only cuts your expected return by maybe 0.3%.

Lobster · Post by **Lobster** » Sun Mar 27, 2016 9:51 pm

Agree that DCA is the way to go

I am in a somewhat similar situation in that I have a large cash position (in my case windfall from work). I'm sold on a three fund strategy and staying the course, but started feeling squeamish about going all into the market all at once. So I chopped it into 10 parts and will buy once per month til I'm all in according to my AA.

I feel a lot better knowing that I will neither be susceptible to a free fall nor be paralyzed by trying to decide the 'right' time.

heyyou · Post by **heyyou** » Sun Mar 27, 2016 10:17 pm

think the stock market is overvalued

So far, I haven't ever been able to "think" what the stock market will do next. I've given up on "think," as that didn't ever work for me. Investing when I had the money, then leaving it there, is what has worked for 35 years. Every time that I invested larger sums, the prices dropped shortly after my purchases, then slowly crawled up to, then past, those prices. I don't like that, so I dread changing account providers, but some say that is normal volatility, fast drops with slow recoveries.

timboktoo · Post by **timboktoo** » Sun Mar 27, 2016 10:46 pm

I have no idea.

In my experience, I would actually be better off flipping a coin to determine market movement than I would by continuing to try to guess. It's been hilarious the number of times I have been completely wrong about how something is going to play out in the market. I am a contrarian indicator.

I just ran a script to look at data from VFINX (Vanguard S&P 500) from 1980-01-03 until 2016-03-24. I looked at adjusted close from Yahoo Finance and compared it to the previous day's adjusted close. Anyway, there were 4156 days that the fund went down compared to the previous day and 4839 days that it went up. The long-term trend has been also, obviously, been up.

The future is totally unknowable. It's laughably unknowable. Asset allocation is how you stay sane in the investing world. Find an asset allocation that fits you well and you honestly stop worrying about stuff like the next downturn altogether.

Peace.

- Tim

Bogle_Feet · Post by **Bogle_Feet** » Sun Mar 27, 2016 10:54 pm

The stock market is always fairly valued. Efficient market hypothesis.

letsgobobby · Post by **letsgobobby** » Mon Mar 28, 2016 12:08 am

triceratop wrote:
letsgobobby wrote:it's overvalued, but not by a ton. stay the course.
Specifically, your prediction is that it is 18.53% overvalued, correct? (1 - 1658.74/2035.94)

very specifically

Post by **oldcomputerguy** » Mon Mar 28, 2016 7:38 am

Bogle_Feet wrote:The stock market is always fairly valued. Efficient market hypothesis.

The market itself may be fairly valued, but I have to confess that when I see things like Amazon 12-month trailing P/E (470), my eyebrows do start levitating.

Toons · Post by **Toons** » Mon Mar 28, 2016 7:39 am

Not At All
Buy the Total Market Today.

David Jay · Post by **David Jay** » Mon Mar 28, 2016 7:41 am

smartinwate wrote:
Bogle_Feet wrote:The stock market is always fairly valued. Efficient market hypothesis.
The market itself may be fairly valued, but I have to confess that when I see things like Amazon 12-month trailing P/E (470), my eyebrows do start levitating.

Amazon has earnings? Who knew...

Post by **oldcomputerguy** » Mon Mar 28, 2016 7:52 am

Enjoy the good life wrote:I plan to use 2 funds--- Fidelity Spartan Advantage Total Stock Market Index Fund and Fidelity Spartan Advantage Total Bond Market Index Fund.

Just curious, what is the ticker symbol for the bond fund you mention? My 401 is at Fidelity, and I have my bond allocation in Spartan U.S. Bond Index fund (FSITX), but I wasn't able to find any such fund as Spartan Advantage Total Bond Index Fund. I did see a Total Bond fund (FTBFX), but it's not Advantage class and it's not an index fund. I was just wondering if I had missed something.

restingonmylaurels · Post by **restingonmylaurels** » Mon Mar 28, 2016 8:07 am

Enjoy the good life,

Here are two views on the current valuation of the US stock market. The first looks at total market cap vs. GDP and the second shows the market price vs. their estimate of fair value of the median stock among all stocks that they cover:

1. http://www.gurufocus.com/stock-market-valuations.php

2. http://www.morningstar.com/market-valua ... graph.aspx

I will leave it to you to determine the credibility to attach to each of these metrics.

BTDT · Post by **BTDT** » Mon Mar 28, 2016 8:17 am

OP,

Yes, I think the stock market is overvalued, but I don't know why. If it's overvalued today, can it be overvalued tomorrow, next week, next year, or 10 years from now? I don't know, and I no longer try to guess what buyers or sellers are thinking.

quantAndHold · Post by **quantAndHold** » Mon Mar 28, 2016 8:49 am

What was your asset allocation with the financial advisor? Maybe you should start there, and adjust as necessary.

As far as the stock market valuation, it might be a little high. It might not be. But even if it is a bit high, it isn't high enough that anyone can predict what direction it'll go next. Ignore valuations, invest your money, get on with your life.

DVMResident · Post by **DVMResident** » Mon Mar 28, 2016 9:57 am

Yes, stocks are valued above historic averages-which is a very noisy measure. The question should be "what are you going to do about it?" There is no where else to go.

Cash yields near-zero (1% is a stretch). Real Estate prices are ridiculously high compared to the rent (YMMV). Fixed income yield is very low.

If you have high interest debt, you could pay that off. Other than that, attractive prices are rare these days.

BHUser27 · Post by **BHUser27** » Mon Mar 28, 2016 10:27 am

DVMResident wrote:<snip> The question should be "what are you going to do about it?" There is no where else to go.
Cash yields near-zero (1% is a stretch). Real Estate prices are ridiculously high compared to the rent (YMMV). Fixed income yield is very low.
If you have high interest debt, you could pay that off. Other than that, attractive prices are rare these days.

I am a *very* conservative investor. I do not have the stomach for principle risk and lose sleep at the slightest volatility.
Saving more and investing less in equities is a perfectly valid strategy.
Why does everyone assume that earning 4+% returns is a *must*. Why is it even necessary to "beat inflation" if you are willing to save more and live frugally?
I do have a small allocation to equities, but I am quite content earning FDIC insured 1~2% on the bulk of my cash in high-yield savings & CDs.
This is a personal choice, and a perfectly valid one.
YMMV

ogd · Post by **ogd** » Mon Mar 28, 2016 10:30 am

nisiprius wrote: Obviously I think this is a good idea, and my rationale is that it cuts the standard deviation about in half, but if you assume (say) 10%/year returns, then delaying the purchase an average of 1.5 weeks only cuts your expected return by maybe 0.3%.

This is because you've mixed a magic sauce in your investments, one that reduces standard deviation to zero while cutting your expected returns by only 0.6%. This magic sauce is called "not investing for 3 weeks". However, the sauce is not as great as it sounds in this formulation.

bertilak · Post by **bertilak** » Mon Mar 28, 2016 10:40 am

My opinion is, that on a dollar weighted basis, about half of market participants think the market is overvalued (or close to about right) and the other half think it is undervalued (or close to about right).

Otherwise, the market would move up or down to correct the imbalance and with today's micro-second trading that would probably happen rather quickly. I admit that some of the under- or over- valuers are assuredly right but I don't think I, personally, could pick them out of a lineup. ("It's number 3, the guy with the Gucci shoes.")

Now there might be something to the idea that a little DCA can reduce short-term volatility, short being defined by the DCA period. Over the long run, short term makes little difference (except in hind-sight which is not available to us at decision-making time) and the longer the short term, the more any potential short-term benefit is outweighed by the penalty of not being fully invested for some significant period of time.

If we limit ourselves to insignificant time periods then it doesn't really matter one way or the other.

David Jay · Post by **David Jay** » Mon Mar 28, 2016 11:47 am

jepalan wrote:
DVMResident wrote:<snip> The question should be "what are you going to do about it?" There is no where else to go.
Cash yields near-zero (1% is a stretch). Real Estate prices are ridiculously high compared to the rent (YMMV). Fixed income yield is very low.
If you have high interest debt, you could pay that off. Other than that, attractive prices are rare these days.
I am a *very* conservative investor. I do not have the stomach for principle risk and lose sleep at the slightest volatility.
Saving more and investing less in equities is a perfectly valid strategy.
Why does everyone assume that earning 4+% returns is a *must*. Why is it even necessary to "beat inflation" if you are willing to save more and live frugally?
I do have a small allocation to equities, but I am quite content earning FDIC insured 1~2% on the bulk of my cash in high-yield savings & CDs.
This is a personal choice, and a perfectly valid one.
YMMV

I suspect that the phrasing above ("what are you going to do about it") wasn't targeted at individual investors like yourself. I think it was targeted at the investment world. Stocks may be high by certain historic measurements, but the lack of alternatives continues to support the market.

greg24 · Post by **greg24** » Mon Mar 28, 2016 12:44 pm

Equity valuations are near historic highs.

Bond rates are near historic lows.

We live in interesting times.

synpacket · Post by **synpacket** » Mon Mar 28, 2016 1:12 pm

I watch the S&P 500 just about every day, for fun. My gut feeling is it wants to be right around 2000. It went over 2100 the past year. The recent "correction" took it down to the 1800's but it seemed people felt that was too low and bought in. So it seems to be just about right, now.

This is pretty worthless information. When you watch it every day, there is absolutely no reason why it drops for one week solid, or goes up either. News sites are completely useless. Every single day they attribute the cause to something that happened somewhere, but the next day the opposite happens. It hardly seems to be based on reality at all. I think it was Bogle who said "Nobody knows nothin" and I really believe that.

BHUser27 · Post by **BHUser27** » Mon Mar 28, 2016 1:14 pm

David Jay wrote: I suspect that the phrasing above ("what are you going to do about it") wasn't targeted at individual investors like yourself. I think it was targeted at the investment world. Stocks may be high by certain historic measurements, but the lack of alternatives continues to support the market.

Yeah, I get that, but my point was to get underneath the (general) assumption the we have to do anything about it to begin with (probably better discussed in another thread). I get that this is an investment forum and the unspoken preface to all these threads is "assuming you want to earn better interest than currently available 'safe' instruments and are willing to take some risk, then... blah blah blah", but it often seems that purposely choosing a low risk strategy that isn't likely to beat inflation let alone historical market returns is considered invalid - a sin actually - certainly not worth discussing. IMO it is *always* worth discussing. Again, I don't want to derail this thread - I'll open another if I want to explore this further.

Cheers.

whatistiaa · Post by **whatistiaa** » Mon Mar 28, 2016 1:51 pm

Let's say we think that the market is overvalued - what would be the optimal changes in the current environment? It seems to me like if you shift equities to bond, you are exposed to a lot of interest risk as well (if you believe Fed will continue to increase rates)

Enjoy the good life · Post by **Enjoy the good life** » Mon Mar 28, 2016 2:24 pm

I agree that right now, there are no attractive prices in the market. I have seen articles pushing for active management to identify the "pockets" of investment opportunities---stocks, sectors, and even countries where a good fund manager will look. Not that I am advocating this.....just stating what I have read.

unclescrooge · Post by **unclescrooge** » Mon Mar 28, 2016 2:59 pm

greg24 wrote:Equity valuations are near historic highs.

Not really. They're just above historic averages.

Bonds on the other hand....

whatistiaa · Post by **whatistiaa** » Mon Mar 28, 2016 3:29 pm

unclescrooge wrote:
greg24 wrote:Equity valuations are near historic highs.
Not really. They're just above historic averages.

Bonds on the other hand....

Can you finish that sentence about bonds?

TomCat96 · Post by **TomCat96** » Mon Mar 28, 2016 4:00 pm

The problem with posing questions like "is the stock market overvalued" is that you garner all kinds of knee jerk reactions. Let's face it, you knew they were coming.

The knee jerk reactions are not helpful unless that's what you were looking for. Some emotional validation perhaps.

I think the better question to ask is what is the premise for the stock market's value? And perhaps more specifically, what is the premise of the value for major components of the stock market.

I'll make my point with LinkedIn. On february 4th to 5th of this year, LinkedIn dropped in price by about 45%.

What happened on Feb 4-5th? I mean did corporate take 45% of the shareholder equity and throw it into a fire?

I think your real question is: can something like that happen to the stock market? the stock market is after all made up of companies. If it happens to one company, can it happen to a string of them? Obviously no one knows the answer to that question. But I think it's more HELPFUL that your question can be redirected to the relevant information which is: what is the basis for the current valuation in stocks?

And I think Linkedin is one example that shows that the basis of a market valuation steeped in expectations of earnings growth. When those expectations failed to manifest, the money left.

I think that many companies are valued in a manner that has expectations of earnings growth already baked into the price, and if economic conditions deteriorate, their prices will fall in manner that will overshoot the actual financial damage to the company for that reason.

I do not know what "counts" as overvalued. You have all kinds of weird theories out there : regression to the mean, heads and shoulders patterns that are all financial voodoo.

But in my book, if a company's stock price is based on expectations of future growth, then that "counts" as overvalued-- it's price will adjust in excess of damage to the company's current fundamental valuation.

Is the entire market like that? I can't tell you. That would honestly require a full time job's worth of work. But I did think that small and midcaps were overvalued since blue chips are not usually valued on growth but small and mid tech-caps are. I thought that small and midcaps were and will still be in the future unduly affected if there is a downturn.

bloom2708 · Post by **bloom2708** » Mon Mar 28, 2016 4:27 pm

Noyesmaybeargh!

Said the pirate investor. Nobody knows.

sreynard · Post by **sreynard** » Mon Mar 28, 2016 5:00 pm

No (Oops! need at least 5 characters)

sreynard · Post by **sreynard** » Mon Mar 28, 2016 5:17 pm

whatistiaa wrote:
unclescrooge wrote:
greg24 wrote:Equity valuations are near historic highs.
Not really. They're just above historic averages.

Bonds on the other hand....
Can you finish that sentence about bonds?

I'll do it.

"Bonds on the other hand are at historic highs."

whatistiaa · Post by **whatistiaa** » Mon Mar 28, 2016 6:19 pm

sreynard wrote:
whatistiaa wrote:
unclescrooge wrote:
greg24 wrote:Equity valuations are near historic highs.
Not really. They're just above historic averages.

Bonds on the other hand....
Can you finish that sentence about bonds?
I'll do it.

"Bonds on the other hand are at historic highs."

I mean for a relatively conservative bond fund, should it be at a historic high most/much of the time?

Caduceus · Post by **Caduceus** » Mon Mar 28, 2016 6:24 pm

Yes, I think the U.S market is overvalued relative to European/Emerging markets. I have thought this for some time, adjusted my allocations accordingly, and so far, I have underperformed a portfolio with a heavier tilt toward U.S. equities. You have to be able to tolerate a high degree of tracking error to act on your convictions.

Enjoy the good life · Post by **Enjoy the good life** » Mon Mar 28, 2016 6:46 pm

So, is this time considered a buying opportunity for the international stock index fund? I just
cannot fathom investing in international because of how volatile their markets are. There are currency exchange differences, the concern over ( I hate to say it!!) terrorism in Europe......look at Paris and Brussels, and other economic differences.

MarkBarb · Post by **MarkBarb** » Mon Mar 28, 2016 7:13 pm

Based on what I've seen in the market, it looks like it is perfectly balanced between people thinking it is overvalued and people thinking it is undervalued. As long as the market is free and functioning, I think that balance is inherently true.

More seriously, I think it looks overvalued because there is an unusually high level of savings relative to available investments. That's why interest rates are low. That's why bond yields are low. That's why stock prices are high. So if your question is whether stocks are overvalued relative to history, I'd say yes, but I don't think that's a useful question. Are they overvalued relative to the returns you can expect in other investments, I'd say no.

danaht · Post by **danaht** » Mon Mar 28, 2016 9:11 pm

I personally believe the US total stock market is a little over valued compared to the rest of the world. I still put some of my money in it. But I am currently placing the bulk of my new investments in VWO, and VEA instead. The main reason I am doing this now is to increase my allocation % for international and emerging markets. I only have a small 5% allocation to international/emerging market equities currently. I want to increase this to 20%.

saltycaper · Post by **saltycaper** » Mon Mar 28, 2016 10:04 pm

Rates are low. Valuations are high. Capital is cheap. Nothing I can do about it. Best course of action? Maybe start a business. Got any ideas? I'm fresh out.

unclescrooge · Post by **unclescrooge** » Tue Mar 29, 2016 3:22 pm

whatistiaa wrote:
sreynard wrote:
whatistiaa wrote:
unclescrooge wrote:
greg24 wrote:Equity valuations are near historic highs.
Not really. They're just above historic averages.

Bonds on the other hand....
Can you finish that sentence about bonds?
I'll do it.

"Bonds on the other hand are at historic highs."
I mean for a relatively conservative bond fund, should it be at a historic high most/much of the time?

The biggest predictor of future bond returns is the current yield.

Back in mid/late 80s, when the yield on 10-year treasuries was 12% (or whatever it was), you could reasonably expect to make 12% a year until the bond matured.

Right now, the yield is 2%. If rates ever go back to 4%, you can expect your bond fund to lose a lot of money. If it happens suddenly, it will lose 50% of its value. This is as close to a permanent loss as it gets. It'll take 12 years of 4% interest payments to recoup a 50% loss. And if it's in a taxable account, even longer.

For many reasons, I don't expect rates to back to 4% for the next several years so this isn't a concern.

But for long term investments (25 years+), I would say bonds are riskier than stocks right now.

ogd · Post by **ogd** » Tue Mar 29, 2016 3:58 pm

unclescrooge wrote:Right now, the yield is 2%. If rates ever go back to 4%, you can expect your bond fund to lose a lot of money. If it happens suddenly, it will lose 50% of its value. This is as close to a permanent loss as it gets. It'll take 12 years of 4% interest payments to recoup a 50% loss. And if it's in a taxable account, even longer.

What? Please go back to bond 101 before advising others. You lose roughly 2% x duration, with the approximation being increasingly imprecise (overestimating) the larger the loss. This means 10% for a typical 5-year fund.

This is because the bonds have maturities and are not perpetual income streams. It's one of the things that make bonds far safer than stocks even if you think they are overvalued: they simply don't lose that much because after a while you are done with a bond, unlike with a stock. And yes, this applies to bond funds too.

unclescrooge wrote:Back in mid/late 80s, when the yield on 10-year treasuries was 12% (or whatever it was), you could reasonably expect to make 12% a year until the bond matured.

It is naive to think that stock valuations are not also influenced by safe yields -- they are competing with them as investments. IMHO low bond yields are as clear indication of lower-than-usual stock returns as you can get (everything else is muddy). It has to do with the current desirability of capital. When you had 12% Treasury yields, you (the hypothetical analyst) demanded a lot more from your stocks as well.

john94549 · Post by **john94549** » Tue Mar 29, 2016 6:13 pm

By definition, a "sale" of anything involves a buyer and seller. For every person who sells an equity at "x", another snaps it up. Now, is "the Market" over-valued? Sure. For example, I just sold 583+ shares of NWL in my Trust. One day later, NWL surges (it's Murphy's Law). NWL has a P/E over 30 (actually, after today, well over 30). Mind you, this is a consumer products company which peddles sharpies and car seats, among other things. Not exactly a tech giant with great growth prospects. Yet its P/E is what it is. Go figure.

Details · Post by **Details** » Wed Mar 30, 2016 7:41 am

Enjoy the good life wrote:Hi all,
I plan on using index funds for my pension profit sharing plan which is currently in a money market fund since I left my financial advisor. He was underperforming the index funds every year for 7 years. I paid about $5,000/year for advice/investing into many mutual funds!

CNBC recently had a story about 1 in 5 financial advisors beat the market.
That means 80% of finacial advisors do worse than the market and then
you get to pay them for that.
What was it, about 40 years ago Bogle figured that out.
I was recently talking with a friend about investing, he said he new nothing about it,
he just paid his advisor 2% a year and he takes care of it. I pointed out that on $1M,
that's $200,000 in 10 years. I don't know if that rang a bell or not.

Mikek