vader1

I keep watching the market post Trump election and the big jump. The it seemed to top out and pull back a little but it is still at about 21 p/e ratio. I watch the market charts daily and see it will go down sharply in early trading only to end up like today, down 6 points. It keeps inching downward, then a slight gain, only to inch downward again. Any predictions on when the market plunges below 20,000 as the experts predict will happen before we start to march upward again?

hirev

Two things influence stocks....whatever happens to the individual stock company that is good or bad(chipolata food poison issues) and market in general (republican govt shut down, financial crisis of 08)...that's it.
so the market goes up and it goes down, it's never a mystery except at that right moment, within a day you always know why there is a gain or loss...and also...some days...it has a mind of it's own for no foreseeable reason, but that is rare.

s2000Junky

Movement is also caused from peoples perceptions and feelings which usually is based on nothing, IE what they heard on the "news" fears, speculations. Being a day trader these days and competing with split second robots is little different then going to a casino and playing your odds there.

And then of course you get the corrupt behind the scenes manipulation BS whether foreign ie OPEC, currency/petrol dolor/currency or gold manipulation. Then here domestically, because lets be honest, Wall Street is run by essentially a cartel and inside trading is just common place so if your not in on it your losing, and 99.9% of us aren't and never will be.

UnkieTrunkie

1. I don't see a correction coming that's so big that I'm changing major positions. Yes, there will be a correction. Yes, it will likely happen between Sep.-Oct. of this year. However, the time (and fees) required to move everything out and put back in (and to time it right?!?!?) aren't worth it this time.
2. I say the above because this has been the most lackluster bull market ever. If you keep looking for the correction, it won't come. . . and it will definitely not come in the place/time/sector that you keep staring at and poking with a stick.
3. My money manager is reducing my U.S. exposure and moving money over to FTSE and European large caps. There's signs that Europe will outpace the U.S. on YTY securities growth. This isn't to say that the U.S. is faltering, but the pace is moderate compared to the projected knee in Europe (esp. European-based multinationals).

vader1

Well I guess technically speaking a correction is defined by a 10% drop, which to me is big enough to change major positions. I keep reading the "experts" and they seem to say correction this summer, or correction this fall, or correction next spring. Clear as mud.

I have also seen a lot of the same stuff as you have that Europe or other foreign markets will outpace the US in the near to mid term. I just know too little about them to make much of a move but we are talking about my employer retirement plans where most of my money is and in those plans I have limited options for international. A Vanguard and one other fund.

I do think the US market is currently overvalued, Could not say when the shoe will drop but most of the value has been driven by IMHO optimism that Trump will get health care reformed and as well as taxes. To do that he will have to stop being his own worst enemy, and congress would have to stop being bickering eunuchs.

I think if the fed makes a realistic interest rate move in June we could see some pullback. And if earnings and jobs reports are average to lackluster we could see the 10% (drop) this year.

My main fear is all of the prognosticators saying the next decade could be a cyclical bear cycle with pretty ho hum earnings. That is about the ten years that eases me into retirement. I'd much rather have a boom thank you very much.

InterHat

The amount of leverage in the markets is high, subprime car loans are teetering, new car inventory is a big problem, commercial real estate and REITs are still overvalued. Additionally, the US tech economy is floating on VC cash which is almost entirely a result of flush pockets from paper market gains.

I think the next correction could wreck some of the existing local success bubbles in areas like Dallas along with a lot of tech startups on the coastal tech hubs. VC money drying up will be the end of a lot of this tech over optimism. The leverage in the markets means money will dry up as confidence does. When the bottom falls out of subprime car loans and leases/used cars flood the market we'll probably see layoffs in the car industry again. Any further downward pressure on retail will mean closings and bankruptcies, making the commercial real estate problem grow.

I don't know though. The current valuation of the markets makes no sense to me - for instance I've have a small amount of money in Tesla but I really feel like I'm making money on other people's irrational exuberance rather than fundamentals.

hirev

there is always a correction coming, say the bulls. there is always a bear market somewhere say the bears. I have been doing this for 17n years now and NEVER pay attention to the exchange numbers.

pick individual stocks you believe in, fundamentals, projected future earnings, cash on hand, what they do and or produce and how you feel abou them NOW.

Example: If you like aapl for what they produce, where there business model is, how much cash they have, earnings, price earning multiple, how you feel about investing in that company, dividend history, lots of factors to consider I am yet to mention. I like appl by the way and say buy it anytime there is a pullback and hold it for the free money (dividend) and the growth, don't day trade it.

and don't be afraid due to the cost of the stock....the really cheap stocks are that way for a reason. And there is always the prospect of a split which in my opinion is a favorable thing most times. Watch for special dividends, it's free money.

vader1

It just keeps going up. Tick.....tick....tick......

Actually moved about 10% of my portfolio to money market today.

UnkieTrunkie

I think if you're wanting to not stay awake at night, that's an idea. I just got some more insight from my advisors:

s2000Junky

Its like 06-07 all over again. We all remember 08. I'm investing cash in my mattress at home. But i dont have enough to gamble/lose so I will have to accept some inflation devaluation.