Home › Forums › Financial Markets/Economics › Would you invest in an S&P500 ETF now?
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Coronita.
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January 4, 2018 at 9:21 AM #22488January 4, 2018 at 11:15 AM #808893
carlsbadworker
ParticipantI don’t think there is any reason for the S&P 500 to crash because it is supported by the healthy profit margin (which is itself supported by the business friendly political atmosphere).
But on the other hand, I will be nervous to step into this market as well.January 4, 2018 at 1:07 PM #808894spdrun
Participant$300k cash will buy you a rental even in this market.
January 4, 2018 at 2:46 PM #808895zk
ParticipantWhat is this “high-yield savings account” that you speak of? I thought those were extinct. Dormant, anyway. What kind of rate are we talking about?
January 4, 2018 at 4:29 PM #808896The-Shoveler
ParticipantNow If I could just get a FDIC CD’s with 10% interest like we could in the 80’s LOL.
Heck you could get 5% CD’s in 2005-6.
That was sweet until the bank folded LOL
(thank god for FDIC).January 4, 2018 at 6:42 PM #808901Anonymous
Guest[quote=carlsbadworker]I don’t think there is any reason for the S&P 500 to crash because it is supported by the healthy profit margin (which is itself supported by the business friendly political atmosphere).
But on the other hand, I will be nervous to step into this market as well.[/quote]I’m not sure what you mean by “healthy profit margin” but S&P500 is expensive by historical standards:
http://www.multpl.com/shiller-pe/
What that chart means that if you buy now you don’t get a lot of income, relative to historical returns, for what you pay. I would label that the opposite of a “healthy profit margin.”
The only tangible aspect of the “business friendly political atmosphere” is some reduction of tax expenses for a limited timeframe. Returns on equities cannot be sustained long-term by a tax break.
As for the OP question, you only asked half a question. Investment decisions need to be made in the context of a holding period.
January 5, 2018 at 4:30 PM #808919plm
ParticipantI would reserve whatever you need to weather a crash and put the rest into the SP500. The key is not to have to sell if or when the market crashes then wait for it to recover.
Learning from experience. Over the summer I put too much into tech stocks and market rotated out of tech and I lost most of my gains and had to sell some at a bad time. But if I had reserved more in cash, I wouldn’t have sold and I wouldn’t have lost anything as it came back up and went even higher.
Same thing happened in December with tech rotating out losing 10 percent but this time I had 20K in cash so didn’t sell. And now within the last 3 days it all came back up.
Going forward as the SP500 keeps increasing, there is a higher chance of a crash, so I will need to increase my cash by profit taking. But it’s very hard not to be greedy with the big stock returns lately.
I don’t think it’s wise to wait for a correction or crash to get in. I missed two years of gains because I was waiting for a correction that never happened.
January 5, 2018 at 9:51 PM #808922CoronitaParticipantBuy bitcoin instead.
If you’re trying to get rich quick by timing the market, speculate on bitcoin. It’s so volatile that the price wildly swings by +-1 $1000 almost each day…So it’s perfect for people who try to time the market.
On the other hand, if you plan on doing a long term buy and accumulate and actually invest, drip a few hundred/thousand into an S&P500 index every month for the next 5-10 years and forget about it.
January 6, 2018 at 8:44 AM #808924
svelteParticipantIt’s so unclear right now it’s driving me crazy.
I was ready to drop quite a bit into the market last week, but took awhile for me to move money around and it has went up so much I’m spooked now. Usually a normal acting market will drop right after it crosses a threshold – like 25K – but this one didn’t…it kept rising like crazy. To me that borders on mania.
Too afraid to drop my cash in right now and look the fool when things tank. Will probably keep it position to drop in should a tank occur, but day after day of rising without pause sure looks like the end of a long run.
I’m losing sleep over this. Luckily I have a patient wife.
January 6, 2018 at 8:54 AM #808927kev374
ParticipantI put in my buy order today, VOO @ 251.25 for 1094 shares, total value ~$275,000. I am going to take a bet that the market will be higher end 2018. Even though it’s crazy I think the market has solid momentum.
January 6, 2018 at 9:00 AM #808928svelteParticipant[quote=kev374]I put in my buy order today, VOO @ 251.25 for 1094 shares, total value ~$275,000. I am going to take a bet that the market will be higher end 2018. Even though it’s crazy I think the market has solid momentum.[/quote]
I’m with you man. Rooting for you. You must have your pants tailor made cuz your balls must be HUGE. 🙂
January 6, 2018 at 9:09 AM #808930Participant[quote=harvey]
I’m not sure what you mean by “healthy profit margin” but S&P500 is expensive by historical standards:
http://www.multpl.com/shiller-pe/
What that chart means that if you buy now you don’t get a lot of income, relative to historical returns, for what you pay. I would label that the opposite of a “healthy profit margin.”
The only tangible aspect of the “business friendly political atmosphere” is some reduction of tax expenses for a limited timeframe. Returns on equities cannot be sustained long-term by a tax break.
As for the OP question, you only asked half a question. Investment decisions need to be made in the context of a holding period.[/quote]
No, I meant real profit margin (https://www.yardeni.com/pub/sp500margin.pdf). It has nothing to do with the tax cut but everything to do with the fact that governments now allow monopoly to exist in almost everywhere.
When a company has monopoly, it is much easier to maintain profit margin (Cox just raised price on almost all tiers in the new year, despite the tax cut). Well, what are you going to do about it?
January 6, 2018 at 9:31 AM #808931CoronitaParticipant.
January 6, 2018 at 11:24 AM #808932Participant[quote=svelte][quote=kev374]I put in my buy order today, VOO @ 251.25 for 1094 shares, total value ~$275,000. I am going to take a bet that the market will be higher end 2018. Even though it’s crazy I think the market has solid momentum.[/quote]
I’m with you man. Rooting for you. You must have your pants tailor made cuz your balls must be HUGE. :-)[/quote]
no need for huge balls, it’s this constant fear that keeps people out. Every single year since 2010 heard the same thing.. your balls must be huge to get into THIS market.
January 7, 2018 at 11:20 AM #808935Guest[quote=carlsbadworker]
No, I meant real profit margin (https://www.yardeni.com/pub/sp500margin.pdf). It has nothing to do with the tax cut but everything to do with the fact that governments now allow monopoly to exist in almost everywhere[/quote]I’m not sure how one would use those charts to predict equity returns. They basically show rising margins since 1992, which I would say can be mostly explained by a general shift in the economy toward services.
[quote]When a company has monopoly, it is much easier to maintain profit margin (Cox just raised price on almost all tiers in the new year, despite the tax cut). Well, what are you going to do about it?[/quote]
Spend less on other things, which will hurt someone else’s profits.
There’s a gazillion metrics that can be used to predict the market – all of them are correct sometimes and incorrect other times. But ultimately price to earnings must be reconciled. By that measure, the market is expensive.
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