Quote Originally Posted by pederson16:
buy buy buy. market NOT overvalued. significant pockets of value in the market. FED will NOT raise interest rates. market has roughly PE of 18-20, historically once PE levels get to 25 as a whole, then we have a top. We are NOT at that point.
Remember, earnings are higher than ever and cash on sidelines is higher than ever. We are in an extended bull market and YES there will be corrections of 20%+, statistically 1x every 60 months, and 1-2 other pullbacks of 5%+ each year, however that is a buying opportunity.
Don't be fooled. Buyers at times like these get rewarded. Dip your toe, then your ankle, then your knee, then your waist, then to your shoulders. Never go underwater. Dollar cost average in and pick your spots. But BUY at times like these. There have been people on the sidelines since 2009 saying the market was overvalued waiting for a correction....and they are still saying that, having missed out on the easiest 100%+ return of a lifetime.
Good luck
Where do you get that info ?
Most tops came with PE well before 25.
Only a few extreme periods of overbuying and overreaction has produced PE's of 25.
The late 20's, just before the great depression, the tech boom, and the housing boom. That's about it, all other tops were reached before a PE of 25.
PE today is 20.33.
I will agree that huge amounts of cash on the sidelines makes the PE lower relative to history.
Also we have far more tech stocks in the market which trade at higher PE's which can cause the PE's to trade at higher levels today relative to history.
Using the Shiller PE, 2015 began with the 11th highest PE since 1881, over 130 years of PE's.
This market is not cheap.
Stocks can go up with high PE's but they go up much slower with smaller gains each year.
But the market can still go up and I suspect it will in the longer run. The economy is far from perfect and has alot of potential to improve and investors are buying tommorrows potential today at a reduced price.
I also suspect the short term could very well be rocky with a possible huge correction coming, at least 10% to a possible 20% or 25%.
Yes it will be a buying oppurtunity if it happens, depends on the news, any kind of bad news, reduced earnings and such will trigger it.
Earnings seem to be down, housing market down, but I have not seen the growth outlook going forward. China economy down, when things begin to decelerate with high PE's very well could trigger a correction.
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