Frothy Stock Market

[WendyBG]

I point out in every week’s Control Panel that the U.S. stock market is in a bubble, driven by a narrow slice of speculative tech stocks.

Now the WSJ is presenting lots of data emphasizing that point.

https://www.wsj.com/finance/stocks/why-this-frothy-market-has-me-scared-295c07c3?mod=hp_lead_pos4

Why This Frothy Market Has Me Scared

When investors are wildly optimistic, it is much harder for the market to rise and much easier for it to fall on any hint that they might be wrong

By James Mackintosh, The Wall Street Journal, Dec. 17, 2024

…
None of these points are proof that the market must fall, let alone that it will happen soon. None have a perfect record and on some measures—such as the American Association of Individual Investors’s survey—things aren’t so extreme. But I don’t want to be part of a crowd buying into a narrow story when prices, valuations and hope are already extremely high, and insiders aren’t willing to back it with their money.

This feels like a good time to take some money off the table. [end quote]

Usually the WSJ is bullish. This time isn’t different. The question isn’t whether the bubble will burst but when.

Wendy

[iampops5]

Even though you can’t time the market, I still try. After taking my SS starting in August of 2022 and putting my monthly proceeds into a low cost etf for the last two years, I put my November SS check into a money market fund and also sold a few high fliers and offsetting losers. I am no Warren Buffet and I have no skill as a market timer but I am increasing my cash position just like I did in December 2021.