Are Stocks Overvalued?

reeltrouble1

So has was that a true bottom hit in March 09. Can a bull market be sustained for some period? I dont know, I rode the little bump we got and pulled just before the latest downturn, but not sure on getting back in.....gotta do something though, just hanging safe at the moment.

I dont want to sow seeds in cold ground as its a sure way to have no growth.

RT1

steveinaz

How many years you talkin? I tend to buy & hold, but I'm after mid-term earnings (moderate risk), with about 10 yrs to retirement. I thinks it still too early to tell if a double-dip is gonna happen, but my gut says no. Though I feel it's gonna be slow going at best.

AudioGenics

I would also like to know that answer.

It would be great if the market has finally turned around
but the deficit is so huge and we may be facing more taxes.

The world is still in Conflict.

might be awhile longer

jflail2

That's a rather broad question. I'd personally attempt to identify specific sectors that have outperformed, and dig into the whys.

sucks2beme

What's overpriced?
The classic formula says yes, most are overpriced.
But since the 80's, this has been largely ignored.
Now we just use the ol' crystal ball.

shack

It is most unsettling period in recent history. The market overreacts (both up and down) on any small titbit of information. I think the market (as measured by the DOW) is just about right just now. I was never convinced that 13-14K levels were realistic or sustainable. I'm not sure we are over the worst yet for many market segments...even though we supposedly have been out of the recession for 6 quarters. LOTS of unemployment and it will be slow to rebound. Companies are holding on to cash and conusmers will not return to historic spending levels for many years...if at all. If I were investing I would be very careful about just what segments I invest in. Small Cap and growth MFs worry me. The better Mid Cap and Large Cap funds might be a better alternative as they will be the companies with cash to expand with when the economy really does turn.

Bottom line...right now I would stay very conservative.

steveinaz

Agree Shack, at least in the mid-term.

punk-roc

as previously stated, time-horizon is everything.

reeltrouble1

PE can be manipulated the 187 rule I think it is allows banks to hide real estate losses, I dunno, what about dividend return a more realistic indicator?....I think this is harder to manipulate...I am retiring in 9 months, but of course have funds I do not need for years.....is a four percent draw down still relevant?

right now I am safe, I could live a long time on savings and annuity pension and so on, I could be happy, but like anything I want to be fat and happy. As such willing to risk on money for return on money, I guess that is it.

From what I can read and experience from past I got a bad feeling, but I could be wrong, no expert.

RT1

steveinaz

Disregard.

AudioGenics

9 months .. standard gestation time.. lucky lucky you
looking forward to retirement but for me it will be awhile.

I asked a CFP just yesterday about the magic draw down number
He said to start really conservative and even vary it depending on your expenditures
but you need to keep an eye on how long you want your savings to last
and not overspend it.

I'm sure he would say the same thing that is to be conservative and not
speculate with your retirement or at least designate a small percentage that you could
"play with".

reeltrouble1

jflail2 wrote: »

That's a rather broad question. I'd personally attempt to identify specific sectors that have outperformed, and dig into the whys.

yes, like anything......do the work, beware the wild cards.

RT1

thsmith

Here you go, if nothing else a good laUGH http://finance.yahoo.com/tech-ticker/article/535663/Stocks-Fine-for-Now-but-Then-Dow-Will-Crash-to-5%2C000%2C-Says-Nenner

AudioGenics

SUNSPOTS... right on !
Hilarious

dorokusai

Yes.

tonyb

I agree,stay conservative. I see a big bubble in bonds, houseing is going to stay in the toilet for a few more years as the banks are withholding their forclosures. What I see is Wall street firms making good by trading to each other,no real growth but their numbers look decent. Market most likely will be pretty bumpy for the next 2 years with the slightest news pushing it up or down. It's also going to be interesting to see what happens with WIKI since he said in January he will release documents that may take down a big bank or 2.

Polkersince85

The Fed Reserve has over 800 banks on their watch list. Mostly real estate troubles, commercial and residentual.

Corporate profits have been high, driving the market, but these are false profits made from downsizing and selling assets not hard profits from sales.

Unemployment running out, entitlements being cut, Federal pay freezes; all these issues will have an effect on consumer confidence.

I'm think the Feds may try to inflate us out of the recession which may backfire here and abroad.

There are so many issues tetering on the edge. A conservative short term investment approach right now may be best. I think if cash is available when this thing makes it's real dip, there may be some bargains to be had.

schwarcw

I tend to agree with Shack. But I like some in Asian/Pacific growth funds, some cash, some bonds. I've had good experience with the people I pay to balance the portfolio for me. Hey, I don't have a lot of money but to try it alone is risky if your an amateur.

Bottom line, if I had RT1's money, I would throw mine away.

dorourke07

Its found a bottom. There will still be swings up and down, but the range is probably 200 points. This will be driven by reactions to the daily news. I would stay with large caps and commodities. Most corporations are sitting on large piles of cash. They have cleared inventory and reduced payrolls. To drive profit, they will need growth. You have to make profit to get bonuses. Now growth may only be a few percent, but it will be growth. You will see M&A action next year as the big guys get bigger and those how are holding on get snatched up. Also, there will be some certainty with taxes and policies. Either the dems will take there turn filiabustering or the tax cuts will be renewed. It will not be easy or painless.

dorourke07

Just remember, stocks are legalized gambling and if you could predict the future you would be too busy on your private island full of supermodels to be posting online.........

CCNJ

Market timing is a difficult thing. You have to time it right twice - when to get out and when to get back in. If I was out of the market now, I don't think I would rush back given the current climate. You might consider buying back in at the dips (small increments) or dollar cost averaging over an extended period of time. Just my .02

dorourke07

Another item that might actually boost stocks is the dollar. It will probably strengthen on European weakness and Chinese bank tightening. Its all crazy. I am working on the fact that right now time is friend and that I can ride out my mistakes.

shack

dorourke07 wrote:

Its found a bottom. There will still be swings up and down, but the range is probably 200 points.

Not hardly. 200 points is NOTHING. It can easily move that much in a single day. We are down 400 over the last couple of weeks. I think we could see 1,000 -1,500 swings in a 6 month period...either way...and we will probably see 10,000 again.

dorourke07

shack wrote: »

Not hardly. 200 points is NOTHING. It can easily move that much in a single day. We are down 400 over the last couple of weeks. I think we could see 1,000 -1,500 swings in a 6 month period...either way...and we will probably see 10,000 again.

Shack - I should have been more thorough with my response. I meant to not be surprised to see that kind of movement in a day. If the OP was thinking of day trading to be prepared for volatility. Timeframe of activity is very important. You can make money on the way down and up. My response was pretty high level and I probably touched too many topics. The DOW has been down 150 points by lunch this week and still closed almost flat at 4:30.

Good clarification.

punk-roc

while the end is probably on the horizon for bonds.. I've been riding a vanguard tax-exempt bond fund for the last 2-3 yrs and been very happy with the returns in for my short-term money..

regular dividends + slight increase in value = happy me

reeltrouble1

I realize asking a bunch of audio geeks for financial advise is crazy but hey.....we got some smart guys...

FTR Carl has more money in flowers planted around his house than my house is worth.....

Well, when you face the end of a career.(mandatory retirement) it may be best to play safe and accept the uh well boredom of it. I suppose everyone finds there way its just a bit of an unknown for me.....I could get another job but I am pretty old to start over and to crabby to work as a greeter, that would last about an hour!!!! I am sick of crooks, cons, thugs and bangers along with the bs of government. But hey I've had a good ride.

I read a doomsday sort of thing very bear predicting the market will crash to 5000, if I had more time like steveaz I might play a bit but I think its best for me to sit tight, hold my sheckels. I can sit with my plan, almost no fee's and diversify 23% in some risk investments, things like small caps, S&P, international and bond or just be totally safe with low growth say 2.5%, Edward Jones is whispering to me about some bonds and certain mutual funds but of course the fees are hard to figure and they want my dough so they can make themselves money, that just the way it works with investment firms I get that but is it really worth it?

Anyone have a line on fee's.....problem is these firms were the same ones that were hell bent and when we lost a bunch they were not to be found.......now their back with a vengence telling folks we can rebuild it, I just really got to be careful.....maybe just to damm greedy, but then I dont want to just let the funds not maximize what growth may be out there......

I am told on a draw down that what happens the first five years is critical......if the nest egg increases slightly or stays the same your fine but if not your in for hard times.....

RT1

punk-roc

I've had my short-term money in a Vanguard tax-exempt mutual bond fund for the last 2-3 years (and while I agree that the bond run has to end, its not ending yet).

regular dividend payments + slight increase in value - taxes = happy me.

not sure if thats helpful.. but thats where I still have that short-term money.. The rest I still just have well-diversified within my Roth and 403b

You could also self invest in some vanguard stuff if you really wanted to do the bond thing that Edward Jones people are doing.. minus a lot of fees most likely

reeltrouble1

Or I could "steal my daddy's cue and make a living out of playing pool" hehehe

RT1

punk-roc

haha, that's harder to do now than it was I'd wager

dorokusai

The only person I would take any financial advice from in THIS place? Is Shack. That's personal but I've always loved the super dooper looper advice from here or there....no offense Polkies.

Get a private advisor. Complain here.

punk-roc

good thing you're not asking =P