The other issue is that we keep focusing on 2000 and 2008 … but virtually all market corrections are smaller and briefer and consequently less painful. We have no reason to expect a repeat of either since both were the result of fairly unique conditions, not just regular up and down of the market.
We’re brewing our own set of unique conditions, though. Big stimulatory tax cut in the 9th year of an expansion has kept the market rolling, hitting sky high valuations seen only once before (per Shiller S&P 500 PE-10). Meanwhile trade war tactics are hurting companies in many sectors, the deficit is shooting past $1 trillion, and the government is deregulating like mad, while the little guy is doing a little better, with unemployment very low, but wage growth and tax cuts have been anemic for the lower-middle class on down, so demand growth may be limited. Seems like a bubblicious recipe to me. Could percolate on up for a year or two but the crash will come and it won’t be pretty.
Glad to see people making a killing on hot stocks/great companies as the bubble ascends. Saul stocks might keep zooming like mad for a while yet. Best of luck to all the investors on this board! If there are those among you, as I suspect, who have made some pretty serious coin on these stocks, and maybe on crypto, but do not have other significant, diversified financial assets … please do heed some advice to set some winnings aside into other productive asset classes than US stocks. A chunk of Vanguard ex-US Global Stock Index would be a nice balance against a US tech dominated portfolio. Rebalancing a portfolio between different asset classes is a way to automate a buy-low/sell high mechanism long term, and can ensure that your portfolio survives an intense bear market.
Rock on!