Stock Market Bulls

Are in Denial!

[Not the Bear’s – it’s the Bull’s]

Market Sentiment

Smart Money buys aggressively!
Capitulation
Despondency
Max-Pessimism *Market Bottoms* Short Term Bonds
Depression MMF
Hope Gold
Relief *Market returns to Mean* 

Smart Money buys the Dips!
Optimism
Media Attention
Enthusiasm

Smart Money - Sells the Rallies!
Thrill
Greed
Delusional
Max-Optimism *Market Tops* U.S. Stocks
Denial of Problem Long Term Bonds
Anxiety
Fear
Desperation

Smart Money Buys Aggressively!
Capitulation

Shiller PE as of 10-27-17

31.49

DYI:

On a valuation basis that pesky method that determines future returns are now higher than 1929!  In many ways it is higher than the year 2000 secular top as most of the over valuation was in the technology companies.  Today it is across the board not just all stocks but bonds and especially junk bonds.

Staying with stocks using my example of holding or buying stocks [such as an S&P 500 index fund] going to sleep like Rip Van Winkle waking up 10 years from now what is your estimated return?  Simple entry level algebra all done for you at Money Chimp.com just plug in two current numbers Shiller PE¹⁰ – 31.49 and current dividend yield of 1.87% click calculate and presto estimated average annual return is 0.03%.  That’s right a big goose egg.  Of course, all before annual maintenance fee’s, trading commission, trading impact cost, and possible taxes if the account is in a taxable [not in a pension] account.

So hang onto your hats and cash better values are ahead!

DYI