I am genuinely thinking of selling all my stocks and just sticking it in a savings account for a few years.

The Buffett Indicator says that the market is very overvalued. However, there are other factors nowadays such as the fact that we are a globalized world and many earnings are from overseas. However, these rate rises and high stock prices makes me think either a crash could happen at some point, possibly soon, or returns will simply be very low, maybe lower than the 5% I can easily get in a savings account.

Talk to people at Bogleheads will clearly be against this since they will probably claim it is market timing etc. However, my instinct tells me this may not be a bad move.

Thoughts?

My main thought is that you've got a lot of questions.

You don't have an edge. Just work and keep throwing money into the market and that is probably the best you can do.

Know you of a little thing called capital gains taxes? What about transactions fees?

Here is a secret to building wealth, assuming you can afford to do so, you want to transact less, not more.

In order to overcome this, I would want pretty strong activation energy. I’m not sure that your gut qualifies.

Why not just redirect new income to savings? Or buy puts, or sell calls?

Using puts and calls will cause taxable events or just cost money.

I think for 99.9% of people if you want to be in stocks just buy a SP500 index fund and play the long term game. If you start messing with trying to "time" the market and all this other nonsense you'll waste time and make less money.

It's 100% market timing and a bad move. A lot depends on why you're investing in the first place

To be clear OP. I wasn’t saying do nt do it. Loosely speaking asset rotation every so often is probably objectively wise.

I was trying to challenge you to have a stronger thesis (and perhaps data) than your gut.

Yeah, if it makes money, then it’s gravy. If not, it’s a loss that can be offset in the future. Liquidating the piety is almost certainly a taxable event.

Hi PLO grinder. I grind PLO too. I just put another $30k into the market but most of my money is in savings to hedge my bets. I don't think it's a bad idea to diversify so a market crash doesn't completely decimate my hard-earned savings and bankroll I need to play. I will probably wait for the next dip to put any more in an index fund and slowly increase that until I'm closer to 50% invested.

It's all about goals and personal comfort level in terms of risk. I'm ok giving up some profits in exchange for peace of mind and less exposure, but that's just me. The money I keep accessible in savings is also part of my roll and I need ready access to a lot of cash so play the stakes I do. (I outperform the market handily.)

Fwiw OP , having a 5%+ on money without any risk is something we didn’t see near 15-20 years and in some countries 25years .

Lowering your allocation in stocks is certainly not a crazy idea .

Ps: I don’t get why some here talk OP about him following his gut feeling .
Doesn’t seem he do when he speak about buffet Indicator.

Thanks for all the responses, they are good and really appreciated.

I should have said that I have two rental properties. One with a mortgage for half the value. It expires in 4 years and now rates are a lot higher. I would like to be in a position to pay this off in 4 years.

I am sitting on cash which is 37% of the amount I would need to pay off the mortgage. I have in index funds, around 48% of the value I owe on the mortgage. If selling stocks I would have to pay capital gains. Also, I would be super concentrated in real estate with nothing else.

I do not work, I used to grind poker for many years and really not keen on this any more.

In a tricky situation since I dont need to work to live a basic lifestyle but dont want to really be bored.

Maybe I will invest the cash I have now and get around 5% a year and leave the stocks as they are, about 85% equity 15% bonds.

The S&P 500 is high , America seems to have benefitted from Europe since the Russia/Ukrine war. However, rates are increasing and times are getting tough for many.

If you need the money in five years and it’s for a mortgage I would stick it in the savings account


I agree that’s 99.9% should just have a sp500 index fund and that’s it as far as the scam market is concerned.

It sounds like you could use one of those job thingamajigs. Fixes the boredom problem and the financial problem.

S&P is only high in real dollars, in inflation adjusted dollars its really not that high right now. look at how much S&P has gone up since covid, then compare that to how much real estate, used cars, bitcoin, groceries and everything else has gone up since covid, S&P returns are either level or trailing pretty much everything else.

These are the same thing. The intention behind your message is good, but you should google nominal vs real dollars.

Even if you're correct you still have to get back into the market when it rebounds and there's no way to know when the recovery happens, nor can you guarantee you capture the large gains that come in a short period of time and ultimately are needed in order to actually achieve the historical return long term investment yields

In other words, you (most likely) will fall behind the portfolio that buys and holds VOO and never wavers...

You lose on compounding. And even if you are trying to make those gains back elsewhere, you are (most likely) simply taking on more risk that you hope justifies the reward...

Timing the market isn't just about getting in low and out high, you have to actually capture the gains. All of them. And never make a mistake. For 30-50 years. Otherwise, you are better off just socking away at VOO

https://twitter.com/BlakeMillardCFA/...wzw8Nq2xg&s=19

Historically, S&P 500 bull markets have lasted about 3.5x as long as bear markets.

Since 1928, $SPY's 27 bear markets have lasted an average of 286 days, while the average bull has lasted 1,011 days.

Also, if you look at valuation like PE multiple, whatever the problem is it's hard to predict the future. The future matters much more. Look at the the valuations in 2009. The PE ratios on the major indexes were nuts. S&P 500 PE was 70, Russell 2000 was like 90 or something lol

https://www.multpl.com/s-p-500-pe-ratio/table/by-year

You're really buying the S and P 500 because it's idiot proof. You just keep buying and holding and never sell.

There's a lot to be said for just spending your money when you get it as well.

If you invest in the S and P 500 ya you will become wealthy at 70, but the time to be banging girls in a hotel in Paris is when you are in your 20s and 30s.

I get the feeling not many here likes to sell at the top .

i get the feeling this is not the first time you've called the top, you will be right eventually

That's the trick, isn't it?

It ain’t about calling the top .
It’s about thinking never sold anything when having great alternative in a very risky environment .



Fwiw I just don’t see where the money will be coming from to think the markets will still go much higher to pass on a 5+% free risk income shrug.
Ps: I’m not advocating to sold everything either .
But the concept of never sell anything at any moment seeem wrong to me .

Hold it, Hold it, Hold it Hold it, Never sell !

Buy more, Buy more, Buy more, Buy more, it’s doing well !

Ben Graham’s 50/50 allocation (or its variations up to 75/25). Graham spent some paragraphs of the Intelligent Investor talking about market timing (like, in the late 60s with the overvalued market he’d suggest lowering to 25% on stocks). It might give you better sleep, but be advised there are markets, like US last 30 years, where even this rotating allocations was suboptimal vs a consistent allocation til death.

With that said, 100% on stocks probably bad to all humans except really good poker players who can bring their pristine mental game to the markets, or some almost perfect rational machine like Buffett etc.

Just keep 75% on stocks, the rest in bonds (no excuses for overvaluation anymore) and keep this til you die, is my suggestion. Never change it, even if the market is crashing or in a bubble and your emotions are killing you, and bringing bad thoughts like you seem to be getting now.

Other bad thoughts imho:

I’m staying put for almost 10 years, I need to do something

I’m a 10 bb/100 winner at pokerstars high stakes, I’m too smart to not at least try to beat the market, via timing etc

This time it’s different because of that article I read and/or some ideas of mine and/or bc I’m underperforming vs x, y or z, or the neighbor I hate is getting the double of my returns (because he said so), some anom unknown from 2p2 so I’ll change strats

The problem is interest rates aren't going to stay at 5 percent.

They will be cutting interest rates next year in response to a recession.

Once the unemployment numbers really start picking up the Fed will fold like a cheap suit.

The money losing all of it's value is the crises.