simoan wrote:This has been an interesting thread to date. I'm not a mod or anything but feel it is about to disappear into the weeds like many threads. Could I politely ask that we keep to the subject of the thread i.e. is it time (right now) to be cautious, and don't let it descend into a discussion of something else like, market timing, HYP or Index trackers?
All the best, Si
I understand your sentiment, but the question of whether it is the time to be cautious now, is the question of market timing. Alternatives to not market time, is to do nothing but have a strategy to cope with market ups and downs, for some that is index investing, HYP and collection of income through thick and thin is another policy, finally some form of diversification of asset types, with rebalancing is a possible policy for ‘interesting’ times.
I think you will be disappointed if you wish to have people answer yes or no to the question, they don’t know. They may persuade you but since they don’t know either…
You may detect market extremes ( we are not there) and then make a judgement, but even at these extremes, markets can reach further extremes.
Howard Marks in his series of newsletters (free) ponders this question at depth, you can see these thoughts going back many years and see how it worked out, there are a couple of books too to summarise, that are worth reading. ( He talks about taking the investment temperature and adjusting the balance between caution and aggression) Along the same lines is the classic by Ben Graham, The Intelligent Investor ( I like the edition with the Jason Zweig commentary) he talks again about a balance between equities and bonds.