I wasn’t going to weigh in on this topic because, as others have noted, we on this board are not young, not inexperienced, less likely to overreact, etc.
But one perspective that I’ve not seen expressed is one of excitement? A long and irrational bull market is a great thing for discerning changes in the fundamental landscape. There may be a paradigm shift in how companies are valued, perhaps favoring crazy top-line growth and relevant new technologies over companies that simply churn out future cash flow.
We are personally at the front end of retirement. We have a 30+ year time line (glide path to ashes) that we are planning for so we still need to be 20-40% in the market (20% now, when the market is insane).
So what’s this “excitement?”
Point 1- the market is not rational, in a traditional sense.
Point 2- the math tells us we will eventually have a reversion to the mean.
Point 3- that will make for some screaming bargains
Point 4- and the opportunity to buy stocks that will go to the moon (exciting) or bust (that part does not excite me so much…).
Paying close attention now to companies like ZS, or even TSLA, allows us to target a traditional “value” entry point, into these disruptive and important companies that are valued like money grows on trees (which is true; one need only look at M3 money supply over the past couple of years…just like 2005-8).
As macro-economic consequences finally come to bear on the markets (whether it likes it or not) there will be a repeat of all of the other wicked gut-wrenching reversions. Paper fortunes will be lost, probably a lot of younger newer investors will be so burned that they’ll be reticent to get back in (except through company 401ks, when they finally find a job), and for 10-25 years or so, everything should look more normal.
To put a personal point on it; we are 401k millionaires. Unfortunately, that brand of millionaire does not allow us to act like millionaires…no private jets or weekend jaunts to the family island off St Barts…or even the Hamptons (ick…sorry if you feel otherwise). A 20% bump-up in assets in the nest egg is quite a big thing; a hedge against serious illness in an out of control health system, say.
So one more shot at being brave when others are fearful is exciting. This time I have 40+ years of experience to guide me to better decisions than youthful optimism and chutzpah ever allowed. It could be as simple as buying ARKK if/when it gets forced to $30 (or whatever).
(but still only 20-40%)