At some point over the next 2-3 years, all of the major stock market indices will be lower. We’re headed into a slowdown, if not a recession. Corporate profit margins are near an all-time high – they will mean revert. Valuations are also quite high – they will mean revert. The housing slowdown will ultimately filter through the rest of the economy. Betting on which direction the guessers that guess what the other people are guessing will push the market in the short term is a sucker’s bet over the long term. Invest in what you truly know and understand (for most people, that’s cash and short-term treasuries); stay away from everything else.
