Doom scrolling and the next financial crash!

Bostonerimus1

I've been reading and watching many pundits who are warning about the levels if debt, particularly in AI, that have cause the markets to grow in the last couple of years. I normally ignore such Cassandras, but this time I find myself agreeing with many of their arguments. It seems like a pretty big bubble and anyone in a global equity fund that owns the likes of Nvidia, Samsung, Micron. Alphabet etc. should be looking at the situation. I've been a long term index investor with maybe 50% in US Equities, 30% in International Equities, 15% bonds and 5% cash. A couple of months ago I decided to change my allocation to 40% US Equity, 25% International Equities 15% bonds and 20% cash. Of course the markets have continued to climb.

Is anyone else becoming more defensive as the Cassandras wail away?

FlorayG

Cassandra was cursed to be ALWAYS RIGHT but nobody would believe her

Are you sure you're talking about the right prophet? 🤣

alanwsg

Cassandra was always right, but nobody believed her.

Desmond_Hume

Not changing anything. If I listened to pundits all the time I’d never invest in anything.

El_Torro

I haven’t moved away from a pure global tracker allocation, but looking at threads like this one (when the topic comes up) there are a fair few people who are leaning away from the US. Personally I think that going 0% US would be foolish, though relying less on the US may not be a bad idea. I’m still not convinced that for long term investors a global tracker is a bad thing,

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82104920#Comment_82104920

You've taken my coat!

Oh, I am so sorry.

It's OK. They're very similar;
it's an easy mistake to make. This one's yours.

Well, how'd you know it's mine?

It's got your name written in it.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/82104919#Comment_82104919

My point was that private equity and the markets in general are rushing ahead and ignoring the nay sayers ie the potential Cassandras

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/82104920#Comment_82104920

That's what I'm afraid of.

InvesterJones

https://forums.moneysavingexpert.com/discussion/6679955/doom-scrolling-and-the-next-financial-crash

If well diversified then one should allow enough time for markets to recover from a crash as doing anything else increases under-performance risk. If you don't have that time then being 100% equities isn't the right call - changing allocation within equities is making a judgement call on out-performance. I don't think I can do that, or I'd be working as an analyst (and still getting it wrong!)

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82104928#Comment_82104928

My one and only global tracker etf in my portfolios excludes USA completely ( XMWX).

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/82104993#Comment_82104993

As we learned in 2007/8, it's difficult to insulate yourself from the US markets. Non-US tech companies like Nvidea, Samsung, ASML, TSMC etc are part of the same proposed tech bubble and something that starts in the US will propagate quickly.