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Is this a sign we are at the top of the market?

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
bluedonkey
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Is this a sign we are at the top of the market?

#423380

Postby bluedonkey » June 29th, 2021, 10:41 am

Not new news but this latest example was on the BBC News website:
https://www.bbc.co.uk/news/business-57466918

I've not been to the supermarket recently to see if the person on the checkout is giving share tips yet. That's a definite sell signal!

In practice, I stay pretty much fully invested.

Itsallaguess
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Re: Is this a sign we are at the top of the market?

#423382

Postby Itsallaguess » June 29th, 2021, 10:45 am

bluedonkey wrote:
Is this a sign we are at the top of the market?


I think it's more of a sign that social-media can be very influential to those that might be susceptible to it...

There's lots of them about, clearly...

Cheers,

Itsallaguess

bluedonkey
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Re: Is this a sign we are at the top of the market?

#423412

Postby bluedonkey » June 29th, 2021, 11:36 am

Well, the S&P 500 is at record highs.

monabri
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Re: Is this a sign we are at the top of the market?

#423414

Postby monabri » June 29th, 2021, 11:43 am

Absolutely, definitely at the peak and everyone should start selling immediately! ... ;)

Seriously, though, I'm struggling to find investment opportunities at the moment in many areas other than in shares which are mainly discussed on HYP- Practical.

Growth ITs are looking toppy and discounts to NAV are generally shrinking. UK & Foreign income ITs are more expensive than 6 months ago ( or, have a lower "yield on offer" for those of a HYP disposition).

Maybe, sit in cash and ponder might be a strategy, certainly for the short term. As for the UK, I feel it might be a long haul to get to , say, a FTSE100 of 8000.....but I'd be more nervous if my portfolio was heavily US biased .

Mike4
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Re: Is this a sign we are at the top of the market?

#423422

Postby Mike4 » June 29th, 2021, 12:11 pm

From the article:

"Andreea Ion was drawn into trading by the low trading fees"

Of all the things likely to attract me to trade an equity, this absolutely has to be off the bottom of the list!

pje16
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Re: Is this a sign we are at the top of the market?

#423427

Postby pje16 » June 29th, 2021, 12:21 pm

monabri wrote:Seriously, though, I'm struggling to find investment opportunities at the moment in many areas other than in shares which are mainly discussed on HYP- Practical.

I felt the same this tax year
Up until now my ISA has been funded and used to buy shares
This year I did an OEIC in a Global Equity Fund (let the pros pick for me !)
and a month in it is doing very nicely

GoSeigen
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Re: Is this a sign we are at the top of the market?

#423441

Postby GoSeigen » June 29th, 2021, 1:11 pm

bluedonkey wrote:
I've not been to the supermarket recently to see if the person on the checkout is giving share tips yet. That's a definite sell signal!

In practice, I stay pretty much fully invested.


I think a sure sign we are not at the top is people asking whether this is the top...

GS

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Re: Is this a sign we are at the top of the market?

#423448

Postby Mike4 » June 29th, 2021, 1:40 pm

GoSeigen wrote:
bluedonkey wrote:
I've not been to the supermarket recently to see if the person on the checkout is giving share tips yet. That's a definite sell signal!

In practice, I stay pretty much fully invested.


I think a sure sign we are not at the top is people asking whether this is the top...

GS


Yes. Surely the real danger sign is people saying "The fundamentals no longer matter, it's different this time".

1nvest
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Re: Is this a sign we are at the top of the market?

#423453

Postby 1nvest » June 29th, 2021, 1:57 pm

bluedonkey wrote:Well, the S&P 500 is at record highs.

0% real gain since 2000 after paying a 2.8% inflation adjusted income.

moorfield
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Re: Is this a sign we are at the top of the market?

#423458

Postby moorfield » June 29th, 2021, 2:09 pm

Let's hope so. I'm still waiting for Vodafone for a quid. :(

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Re: Is this a sign we are at the top of the market?

#423551

Postby vagrantbrain » June 29th, 2021, 6:12 pm

I think valuations are on the more expensive end but in contrast to internet bubble it seems to me that the craziness is limited now to crypto and a handful of meme stocks rather than the whole market. Some of the tech stocks that have soared in the last year are producing real revenue growth to back these valuations up. SAAS is a great business model especially combined with the latest fashion for cloud computing for example.

I see the new app based platforms as a good thing to bring investing to those of lesser means, and I wonder if people said the same when the internet based XO brokers came on the scene 25ish years ago?

absolutezero
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Re: Is this a sign we are at the top of the market?

#423680

Postby absolutezero » June 30th, 2021, 10:51 am

bluedonkey wrote:Well, the S&P 500 is at record highs.

And could go higher still.
Record highs alone mean nothing!

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Re: Is this a sign we are at the top of the market?

#423710

Postby Urbandreamer » June 30th, 2021, 12:38 pm

absolutezero wrote:
bluedonkey wrote:Well, the S&P 500 is at record highs.

And could go higher still.
Record highs alone mean nothing!


Indeed so. I was one of the 90's (well late 80's) "so called"* retail investors who's first act was to spend half my brokering cash on Next shares, who were on a high for the year. I sold them less than six months later doubling my money.

*Sorry, but the idiot who wrote the article linked in the first post used the term "so called". They also ignored the fact that there was a boom in "so called" retail investors in the 80's, who for some reason all knew Sid.

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Re: Is this a sign we are at the top of the market?

#423713

Postby pje16 » June 30th, 2021, 12:45 pm

Urbandreamer wrote:They also ignored the fact that there was a boom in "so called" retail investors in the 80's, who for some reason all knew Sid.

Have you seen him? :lol:

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Re: Is this a sign we are at the top of the market?

#423718

Postby hiriskpaul » June 30th, 2021, 12:59 pm

It is predominantly US stocks that are at frothy valuations and mainly the growth stocks, which have bounced around a lot this year and are roughly where they were at the start of the year. US value stocks have bounced back this year but they are still on reasonable valuations IMHO. EM looks good value compared to most developed markets as well.

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Re: Is this a sign we are at the top of the market?

#423732

Postby BT63 » June 30th, 2021, 2:03 pm

The graph of the S&P reminds me of the Nikkei in the late 1980s.

But this time it's different; the central bank is injecting $120B each month and the stock market graph looks very similar to US money supply.

My best suggestion is to watch and anticipate the rate of change in the money supply.

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Re: Is this a sign we are at the top of the market?

#423789

Postby 1nvest » June 30th, 2021, 6:02 pm

BT63 wrote:The graph of the S&P reminds me of the Nikkei in the late 1980s.

But this time it's different; the central bank is injecting $120B each month and the stock market graph looks very similar to US money supply.

My best suggestion is to watch and anticipate the rate of change in the money supply.

A Japanese investor in J stocks did see a lost decade. If they'd instead held a third each UK/UK/J stocks they did fantastically well, far excelled US/US gains. Also whilst their since 2000 gains are relatively low down at around 4% real, US and UK main indexes have been more down at less than 3% real.

Much of the Japan lost decade seems to be down to a number of giants that rose to massive (Yamaha, Sony ...etc. global household names) but then fell back but to levels where they were/are still giants and as such dominated the index.

Warren Buffett's 1979 (IIRC) Chairman's letter is a interesting read in particular about how (paraphrasing) despite all of the blood and tears over 15 years Berkshire book value just bought the same amount of gold at the end of that period compared to the start of the period and other comments about 'money printing'. It's great being a legal counterfeiter, print/spend as much as you like - that devalues all other notes in circulation (micro-taxation). Forget all of the prior pledges whereby others agreed to accept the replacement of gold by the US$ as the primary reserve/currency and instead print enough to instate a great enough army to enforce their will/control. That does look like it could be in its twilight years however, where the 'others' have had enough. The US argument is TINA, there is no alternative, but others are getting close to a TIAA - there is a alternative, just that at present no one single choice is commonly agreed (IMF SDR's (basket of currencies), Arabian version of that (different basket of currencies), China/Russia recognising the others currency as being core ...etc.). When that does occur, i.e. likely common agreement of a particular set of global basket of currencies then the US's print/spend days will come to a end and its capacity to sustain a massive army/control will fade. Most major currencies that rise to dominate tend to fade after a century or so and its looking like the US$ might become just another. China however historically dominated for over 2000 years, has faded, but seemingly is rising back up again. The Pound did well, born in the 750's when it represented a Saxon pound weight of silver. The 20 year newborn Euro already looks to be unstable and excels even the US at counterfeiting so looking to be a non-starter.


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