Effects of inflation

Albermarle

As above - trying to second guess the markets sometimes works but often doesn't .

mrlegend123

When the S and P 500 is at an all-time high, it is time to stockpile cash.......inflation or not 
People who think the markets will go to the moon are crazy....buy the dip, correction or crash

Albermarle

People who think the markets will go to the moon are crazy...

I agree and I would not be putting large lump sums in US equities right now.

buy the dip, correction or crash

However this is not as easy to get right as it sounds . Usually I find  sitting on my  hands as good a strategy as any .

Notepad_Phil

mrlegend123 said:

When the S and P 500 is at an all-time high, it is time to stockpile cash.......inflation or not 
People who think the markets will go to the moon are crazy....buy the dip, correction or crash

Being at an all-time high is not a reason in itself to stockpile cash - markets are frequently at or close to all-time highs and you'd miss out on much of a markets gains if you refused to invest just because they've reached an all-time high.

Thrugelmir

Deleted_User said:

mrlegend123 said:

When the S and P 500 is at an all-time high, it is time to stockpile cash.......inflation or not 
People who think the markets will go to the moon are crazy....buy the dip, correction or crash

 You shouldn't be ignoring the biggest stock market in the world. (Though you might choose to hold less in US equiities than their >50% share of global market capitalization.)

Indexes are screened and weighted.  US is nearer in 20% in terms of capitalisation of listed companies globally.  China if treated as an equal would be in a similar ball park to the USA . 

mrlegend123

Deleted_User said:

mrlegend123 said:

When the S and P 500 is at an all-time high, it is time to stockpile cash.......inflation or not 
People who think the markets will go to the moon are crazy....buy the dip, correction or crash

Telling people not to buy the S&P 500 because it's at an all time high is bad advice if (for instance) they are new investors with money to invest. You shouldn't be ignoring the biggest stock market in the world. (Though you might choose to hold less in US equiities than their >50% share of global market capitalization.)

OTOH, if you are already invested, and your S&P 500 holding has outperformed most of your other holdings over the last year, then you may, just by following your investment plan, be trimming your S&P 500 holding back, or adding new money to other holdings instead.

Stockpiling cash is all very well, but how fast is it going to build up? This depends on whether you're just pilling up income from investments, or also savings from your earnings. If you will quite soon be up to a large proportion of your portfolio being cash, then you are creating a problem of deciding when to invest. What counts as a dip? Do you go all-in at the next dip? Playing it by ear is perhaps the most dangerous approach. Better to keep on investing according to your original plan. (You did have an original plan, right? .)

yes. I am still invested but building up cash pile. If I was a new investor I wouldnt invest in the US (good advice). 

mrlegend123

Notepad_Phil said:

mrlegend123 said:

When the S and P 500 is at an all-time high, it is time to stockpile cash.......inflation or not 
People who think the markets will go to the moon are crazy....buy the dip, correction or crash

Being at an all-time high is not a reason in itself to stockpile cash - markets are frequently at or close to all-time highs and you'd miss out on much of a markets gains if you refused to invest just because they've reached an all-time high.

Wrong when you use CAPE, the markets work in cycles. No-one invests at the top with high CAPE - mad. 

tichtich

I wouldn't be trying to time the market if I'd already been invested for years,  like many of those here, and had benefited from past price increases.  But investing a lump sum at today's very high prices (perhaps as much as double historic p/e ratios) means resigning myself to very low returns on that lump sum.

Of course staying out of the market is a risk too. Prices might stay high for a lot longer. But I think that's the lesser risk when prices are already this high.

This is a difficult time for new investors, especially those starting with a lump sum. 

thegentleway

Slow and steady Sarah usually beats Brittany who buys at the bottom: https://militarymoneymanual.com/how-to-time-the-market/

mrlegend123

Deleted_User said:

mrlegend123 said:

Wrong when you use CAPE, the markets work in cycles. No-one invests at the top with high CAPE - mad. 

Sorry, that is simply wrong. Somebody who has a large lump sum to invest should crack on an invest right away. Perhaps with an asset allocation which has been tweaked a bit because of the high CAPE. But just staying in 100% cash in the hope of a better buying opportunity which may never come makes no sense.

I didn't say I was in 100% cash....... don't invest in a high CAPE Market.