Are you starting to think that the (US) Market is possibly beginning to look a little expensive?

(Matthew) #1

As part of my ongoing eduction into all things stocks and investments, I have started to think that the new share price highs that I keep reading and hearing about on a daily basis (CNBC, etc.) probably can’t go on forever, and that maybe the (US) market is possibly approaching it’s peak ahead of a potential downturn.

Having done well during the last few months and being happy with the gains that I have made so far, it did get me thinking about how this could all suddenly change is the US economy went into recession and the global share prices took a hit, or even crashed. To be honest, I’m no economist and so I had this thought ratting around in my head but I didn’t really do anything about it. I just focussed on day to day life, and continued to enjoy checking my portfolio each afternoon and seeing the total portfolio value continue to increase. Life was good. :slight_smile:

I continued to keep seeing shares hit new highs, low unemployment & inflation figures coming out of the US, etc. However, in spite of all of this good news the niggling thought in the back of my head kept telling me that this just can’t carry on forever, and that I should probably do something to get my brain around both what’s going on and what it potentially all means. Again, not that I really did anything about it aside from gloat abut my recent gains to my mates in the pub.

At this point I stumbled upon a Channel on YouTube called “HedgeEye” and I watched their “Live Events (Replay)” series. This really opened my eyes and got me thinking a bit, well quite a lot actually, and lead me to come to the conclusion that I should probably make the community aware of it. After all, we’re all in this together right!

Hedgeye are a macro economic and markets research company, and from what I can tell they appear to know their stuff. Their videos aren’t for the fait hearted, but forewarned is forearmed, and all of that good stuff. So, if you have a bit of spare time and want to form a view regarding where this is potentially all heading, then you might want to check out their web site and watch a few of their YouTube videos.


I have no connection to Hedgeye, but I felt that this was worth sharing just incase the thinking of the Hedgeye team does end up being proved right.

I’ll be aiming to remain invested for the foreseeable future, but this has certainly got me thinking that I might become very interested in moving towards something a bit more defensive and recession resilient within the next few months. REIT’s & Utilities anyone? :wink:

Do your own research, happy investing, and if this information ends up helping anyone from making an inactivity based potentially expensive mistake, then it’s done its job.

Enjoy
Matt

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(Ben) #2

For me my profits on HL are at where they were this time last year. So after a year of investing I’m no worse off. So for me I feel like I lost a 2018/19 growth on returns for my investments. Maybe they grew too much or too fast, but I need to see quite a bit more growth to get back. If China and US stop squabbling I see a substantial rise this year. I prefer to buy and hold and just drip invest. It’s the best way.

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(Kevyn) #3

There is rumours of another price correction/crash on the horizon. It makes me feel should I cash out and wait until the fall before re-buying lower.

(Emma (#20 😎)) #4

Timing the market isn’t the safest approach either though

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(Ben) #5

I like this article. My post on the fictional “Bob’s world worst investor” is exactly what this is all about.

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(Kenny Grant) #6

Yes.

Because trade wars are heating up between US/China and US/Europe, and Europe and the US are being weakened from within. Risk is high right now IMO but not priced in to markets.

But what are you going to do about it? If your investing horizon is > 5 years there’s not much point in doing anything save perhaps saving a bit more in cash for the short term so you are in a position to buy. You could also consider a world etf, which is heavy US right now but will rebalance over time if other economies come to the fore.