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Please tell us what you bought today.

I bought EPD and XOM. Both met (were under) Buffett’s 10:1 Market capitalization to Pre-tax earnings threshold and averaged together represent about a 5% yield on today’s financial outlay.

I held back the other 2/3 of our available cash to see what gets cheaper in the weeks ahead as Mr. Market is unpredictable, especially when dealing with unknown consequences such as are happening in the world.

What did you buy today?

Uwharrie

I made a few trades

* SOLD : DG, BRK
* BUY : GOOG, QQQE

tecmo
...

Please tell us what you bought today.

Nothin'

I bought EPD and XOM. Both met (were under) Buffett’s 10:1 Market capitalization to Pre-tax earnings threshold and averaged together represent about a 5% yield on today’s financial outlay.

I don't think he would ever be dumb enough to use that alleged rule, no matter what RW says : )
Taxes are real things, I've found.

Jim

I am still not buying.
This is comparable to the market decline during Covid.
If you are an LTBH type investor, I believe you will get better opportunities later in the month or the year.

I think Trump has spent too much political capital to reverse the tariffs suddenly tomorrow or in a week. But that is a wild card. If that happens, the opportunity might disappear partially. It's the double whammy of tariffs and uncertainty driving the markets down. The tariffs might go away, but the uncertainty will still be there. I am not too worried about it. I think in the coming weeks or months, we will see more people panicking, and selling everything at fire sale prices. Of course this is just my wild guess, but that's how I am proceeding.

I think Trump has spent too much political capital to reverse the tariffs suddenly tomorrow or in a week. But that is a wild card. If that happens, the opportunity might disappear partially.

That assumes the tariffs are the underlying cause of the sell-off. I think more along the lines that they are simply the spark, with the underlying cause that stocks are unreasonably expensive, that thanks to that catalyst just happening what at some point has to happen.

A small amount of R2K

I bought a nice bottle of Hors d'Age French Armagnac, and a half gallon of Bombay Safire gin.

I looked at EWS, the IShares Singapore ETF. Singapore made the highly desirable 10% list, while all their neighbors face much higher tariffs. I used to have a consulting office in Singapore, and I can easily imagine a whole lot of Malaysian electronics, Indonesian textiles and Chinese goods passing through Singapore for new labels. EWS has lagged the US market and is currently in falling knife mode, but on my watch list.

Tomorrow I'm going to look at small imported Honda and Yamaha outboard motors for an inflatable boat, which hopefully will take me way up into some desert canyons and mangrove flats, where I can hide from the world of politics and finance.

EPD no brainer. SAFE YIELD AND GROWING

I bought a nice bottle of Hors d'Age French Armagnac, and a half gallon of Bombay Safire gin.

You did not, unless you bought three 750 ml bottles and salute the Union Jack.
1.75 != 1.875.
I know, real Americans can't do weights and measures math. If miles and gallons are good enough for the US, they are good enough for the rest of the world.

It was the big-ass bottle. I can drink it in either system, but the Brits gave us the weird units so I refer to Brit booze in those units. I actually can do metric stuff---I got special approval in 1978 to denominate may master thesis in metric units, and make friends uncomfortable by doing all my carpentry in metric units (unlike the Canadians!).

I sold some ATM puts (now ITM) of IBKR

That assumes the tariffs are the underlying cause of the sell-off. I think more along the lines that they are simply the spark, with the underlying cause that stocks are unreasonably expensive, that thanks to that catalyst just happening what at some point has to happen.

I disagree. All stocks are getting sold off regardless of valuations. Including non-US stocks, and small-cap US stocks, and reasonably priced large- or mid-cap US stocks. This smells like the beginning (or the middle) of a panic sell.

I am more than 75% in cash or liquid equivalents outside of retirement accounts and I did not buy anything. My selling was done long ago.

The market is still priced above historic valuations, and it's hard - as someone stated earlier, as bullets are still flying - to assess the damage. We are watching a Steve Bannon and Curtis Yarvin driven destructive realignment of the existing global power structure. Unfortunately, the US is burdened with this lunatics and other global powers are not, and they continue to capitalize on our mistakes. And for those that missed the joint response from China, South Korea, and Japan to our tariffs - these increasingly persistent realignments are already happening.

It's just a terrible time. It's hard to think about investments while watching the Library of Alexandria burn. I think we are watching permanent impairment of economic productivity along with a marginalization of the USD for a longer time than many of us will be alive.

There are possible ways out before start incremental and broad purchases. I'll be looking for business resiliency over valuation this time. So XOM, WMT, backhaul telecom... the last bills that people and corporations will cut, and have limited exposure to currency fluctuations or trade. I may look for more leveraged companies than usual, as long as maturities are further out, also, as they may be able to repay their debts with devalued dollars in the future. I will likely devote some to non-US equities but probably via fund or ETF to spread risk.

Sold Oct $90 Puts on Nvidia for a premium of $12. Stock was trading at $94 and change.

If put, will own the stock for around 20 times 2025 earnings. If earnings and growth expectations are met over the next few years, this would prove to be a great buy. 3-5 years EPS growth is expected to be 35%, so earnings could double in 2 years and PE would be 10 times 2027 earnings.

I however expect to be “disappointed” and just be satisfied collecting the premium. Something has to give soon on the tariffs. Republicans like Senators Cruz are already fearing a midterm bloodbath and calling for an end to the turmoil.

During this bear market I will only be buying high growers selling at reasonable prices, rather than slow growers selling for single digit PEs. I did that in 2009 and 2020 and regret it.

It's just a terrible time. It's hard to think about investments while watching the Library of Alexandria burn. I think we are watching permanent impairment of economic productivity along with a marginalization of the USD for a longer time than many of us will be alive.

Speak for yourself! I’d lose another million in the market just to watch the lies and hysteria of the dumb leftists. You should celebrate tonight, go scratch a Tesla, maybe you’ll feel better 😘 I’m going to get more champagne !!!

It’s margin calls
Lots of people getting margin calls

I’d lose another million in the market just to watch the lies and hysteria of the dumb leftists. You should celebrate tonight, go scratch a Tesla, maybe you’ll feel better 😘 I’m going to get more champagne !!!


This is why we can't have nice things.

https://youtu.be/t7KBe4C6ZYg?si=mHf25oP_arZBL_kF

I take that all back, we could have had this great leader 😊. Close call to oblivion!

I bought a one month treasury. 😩

Speak for yourself! I’d lose another million in the market just to watch the lies and hysteria of the dumb leftists. You should celebrate tonight, go scratch a Tesla, maybe you’ll feel better 😘 I’m going to get more champagne !!!

I think you have had enough. I am sorry but we have to cut you off now.

That assumes the tariffs are the underlying cause of the sell-off. I think more along the lines that they are simply the spark, with the underlying cause that stocks are unreasonably expensive, that thanks to that catalyst just happening what at some point has to happen.

Yup, I would agree with that.

SPY was up 25% in both 2024 and 2023.
The Magnificent 7 have been on a roar for the last couple of years. Even today after the recent huge selloffs, S&P500 Top 10 Holdings are 33.47% of Total Assets.

Technology Sector is 31.00%.

That's a lot of concentration in a few stocks, and people who had a large holding have a huge unrecognized gain. A bit of panic and everybody heads to the exits. Which drives down prices and feeds back onto itself.

I’d lose another million in the market just to watch the lies and hysteria of the dumb leftists. You should celebrate tonight, go scratch a Tesla, maybe you’ll feel better 😘 I’m going to get more champagne !!!


This is why we can't have nice things.

If someone is offering to give you a million dollars for the privilege of observing you, don't argue with them - take the money and move it into a stable foreign currency.

N.b. instant blocking of sneering (list of adjectives) posters has made this group, and social media in general, far more pleasant. Recommended. Nobody has to actually engage with (list of adjectives) posters, and there is no virtue or learning in doing so.

I sold one BRKB $450 put, expiration in Jan 2025.
The premium was 3200.

If I get put the shares, the effective purchase price
will be $418, which should be about 1.3 times book value
at that time.

Stopped Clock

Oops, expiration is Jan 2027, not 2025.

Stopped Clock

Today bought coffee, olive oil, balsamic vinegar from Modena, and a few bottles of champagne. All imported products that I regularly(ish) consume, but the US government decided I need to pay more for.

Sold Oct $90 Puts on Nvidia for a premium of $12. Stock was trading at $94 and change.
Yes! To both NVDA and selling cash secured puts in this market. Was thinking exactly the same thing today but didn't pull the trigger, now I don't feel so lonely.

I sold a bit of my 'disaster puts' today i.e. the OTM puts that I bought a while ago when VIX was low. The effect of a vol spike on option prices is quite remarkable. These were a side bet, I'm mostly out of the market, and now regretting that I didn't bet more.

I bought QQQE and GOOG with some limit orders I put in a few days ago. Will take some time this weekend to look at things I want and what prices I would be happy to get them.

Covered some short R2000 micro-futures based partially on minor-bottom signal. Will look at shorting them again late next week.
Bought some SOXL for a couple of day rebound bet.
Bought some UBER, CVX, TOST, DTAN

Tails

SPY was up 25% in both 2024 and 2023.
The Magnificent 7 have been on a roar for the last couple of years. Even today after the recent huge selloffs, S&P500 Top 10 Holdings are 33.47% of Total Assets.

Technology Sector is 31.00%.

That's a lot of concentration in a few stocks, and people who had a large holding have a huge unrecognized gain. A bit of panic and everybody heads to the exits. Which drives down prices and feeds back onto itself.

All of this is true, and explains Thursday's sell off well, when foreign stocks and dividend payers were mostly spared.
In today's sell off, if you look at any broad swath of the market, everything fell 6% +/- 1%. As sleepydragon said, maybe it's the margin calls and people are selling everything to fulfill the margin requirements.
I don't think it's going to stop yet, because the fundamentals have been cut off at the knees by tariffs. Lower earnings, higher inflation, lower profit margins, you name it. A stupid destruction of wealth, a man-child pulling wings off of a butterfly.

Fairly early yesterday I sold some BRK-B and some VASGX (fund of funds, stock and US heavy globally diversified index). They were about 5-6% and 14.5% off of their peaks respectively. I was late selling the VASGX, and hampered by the sale only occurring at the closing price yesterday, but feel pretty good about the BRK sale. I kept the vast majority that I owned of both securities, but sold enough to make a difference to my portfolio returns if it pans out.

The plan is to pivot to DFSV (US small cap value - SCV) after the major bottom indicator has fired a cluster of times, because SCV is already well below average valuation, having peaked last year at only a bit over average and being down ~25% at this point.

There is some research indicating a lasting advantage in return for small cap and value stocks, on average. I have some level of belief in that, since it squares with my knowledge of how behavioral economics interacts with the stock market. So, buying SCV in depths of a major bear market sell-off is a good play, and I don't have to worry about company specific risk, which is good because I don't have a very good record of picking stocks.

Speak for yourself! I’d lose another million in the market just to watch the lies and hysteria of the dumb leftists. You should celebrate tonight, go scratch a Tesla, maybe you’ll feel better 😘 I’m going to get more champagne !!!

I like this plan. I'm in Schwab, and trying to think through my limitations there. Not to great a thinker at the moment, though I do well in Sudoku, my go to to wee if I've had a lapse. How far is the USD going to go down? I'm in deep kimche, me thinks. Scratching a Tesla is no solace when you lose Canada as a friend. People gloat over this? Why, in my old age, does it seem like the world is going to hell and we started it?

mostly agree, but I sold some more BRK to bring my cash reserves up to 3years, then reduced it by buying a very little LRCX.my cash is in SPAXX and FDLXX.

Bought some SOXL for a couple of day rebound bet.
Bought some UBER, CVX, TOST, DTAN

I'm not complaining about any post in particular, but can we please include both the company name and its ticker in our posts? I don't recognize many of the tickers being thrown around. And using tickers alone fosters a trading-sardine mindset over an eating-sardine mindset. Thanks!

There is some research indicating a lasting advantage in return for small cap and value stocks, on average. I have some level of belief in that, since it squares with my knowledge of how behavioral economics interacts with the stock market. So, buying SCV in depths of a major bear market sell-off is a good play, and I don't have to worry about company specific risk, which is good because I don't have a very good record of picking stocks.

I have read quite a bit about that. I have read quite a bit about that. It is called the French Fama 3-factor model. Meaning factor 1 is equities do better than bonds, factor 2 is small cap does better than large cap, and factor 3 is value does better than growth. It was discovered in 1992. It worked amazingly well from the 1920's through the 1980s. However it has not worked on a consistent basis since 1990. That is 35 years. If something stops working for 35 years, I think it is safe to assume it no longer works.

I am a victim of it. I discovered it, just about the time it stopped working.

French Fama 3-factor model. Meaning factor 1 is equities do better than bonds, factor 2 is small cap does better than large cap, and factor 3 is value does better than growth.

Fama & French later added a fourth factor, momentum IIRC. Maybe a fifth, quality.
All the simple models, like the dividend discount model, or (alpha and) beta, Sharpe and Sortino ratios, and especially Black-Scholes(-Merton) for option pricing, can be consigned to the dustbins of history. None of them works or has any predictive utility.
And I don't think it's because they were widely publicized so investors did away with the arbitrage by, e.g. bidding up SCV stocks or the more volatile high-beta stocks. They are all just useless.

Mark19 wrote: "French Fama 3-factor model...worked amazingly well from the 1920's through the 1980s. However it has not worked on a consistent basis since 1990. That is 35 years. If something stops working for 35 years, I think it is safe to assume it no longer works. I am a victim of it. I discovered it, just about the time it stopped working."


I'm not so naive to believe that SCV will outperform from all start points. The sector can be bid up and overvalued like any other, and then have relatively poor performance following. But, from my perspective the theory has held up pretty well.

Dimensional Funds Small Cap Value Fund, DFSVX, has been around since the early '90s, and was instituted to embody the theory. Since inception in 1993 it has returned a compound return of 10.8%, according to their website, with an end date of 3/31/2025.

Using Shiller's data I see the S&P 500 was at 450 in March 1993 and was 5612 3/31/2025, for a compound annual growth rate of 8.2%, according to a web calculator.

Looks like a very sizable outperformance to me. Do you disagree?

At the S&P 500's end date, it is/was very richly valued compared to average, despite the recent correction.

At the SCV index's end date it is/was significantly under valued compared to average, having been just a little above average valuation prior to the recent mauling by the bear, which dropped it down 25% from peak as of 4/4/2025.

So, whether or not you believe the small and value factors contribute to long-term outperformance on average, there is a strong argument for investing in SCV at the moment on valuation reasoning. And since it has been and likely will continue to be sold off along with everything else, that valuation is likely to be extremely favorable if this bear market continues to a capitulating bottom like they tend to do.

"S&P 500 was at 450 in March 1993 and was 5612 3/31/2025, for a compound annual growth rate of 8.2%, according to a web calculator."

10.3% with dividends reinvested, according to https://ofdollarsanddata.com/sp500-calculator/

Still an outperformance by DFSVX (at 10.8%) over that long period, and I agree with your points on current relative valuations. I'm with you, just waiting for somewhat better prices (still) to buy into U.S. SCV (already have some int'l with AVDV, which tanked last week).

Odzar wrote: [BenSolar wrote] "S&P 500 was at 450 in March 1993 and was 5612 3/31/2025, for a compound annual growth rate of 8.2%, according to a web calculator."

10.3% with dividends reinvested, according to https://ofdollarsanddata.com/sp500-calculator/ "

Thank you for the much needed correction there. I thought that something was off but didn't catch the error.

10.3% with dividends reinvested, according to https://ofdollarsanddata.com/sp500-calculator/

10.07% for SPY and 10.50% for DFSVX according to testfol.io
https://testfol.io/?s=8vwesonZVEW

Pretty impressive considering that there is no overlap and DFSVX has none of the Magnificent 7.

Although SPY had a -55% drawdown and DFSVX was worse at -67%.

10.07% for SPY and 10.50% for DFSVX according to testfol.io
https://testfol.io/?s=8vwesonZVEW

Pretty impressive considering that there is no overlap and DFSVX has none of the Magnificent 7.

Although SPY had a -55% drawdown and DFSVX was worse at -67%.

Yep, SCV is more volatile than SPY, which I'm hoping to make work in my favor: SPY is down 17.6% from its high as of Friday. DFSVX is down 25.8%. Stocks as a rule become correlated in dropping all at once during the bear capitulations. Say the S&P 500 drops another 10% of its peak in the coming week and we get a cluster of major bottom firings. DFSVX will probably be down more, say 12-15%. Even though I don't really think that would be the end of the bear, and the S&P would still be quite overvalued, SCV would be under average value by something like 35-40% and that would be a very good purchase point.

If Trump decides to take a clue from the market (and every economist on the planet) and declares victory and backs off the tariffs to something more sane, maybe it won't be too much worse than that. I have no faith that will be the case, but I am very worried about missing the turn and next thing I know I've made a breakeven or losing trade because I missed a rocket off the bottom.

I could make the trade today and do well, but I feel sure there's more on the table that can be taken safely before a rebound. I don't expect Trump to give up on his biggest policy initiative too quickly.

Please tell us what you bought today.

I bought some UK equities this morning, maybe 3% of portfolio.
Since they pay pretty big dividends, and given my consistent history with dividend payers, I assume my picks will see a major implosion soon...

Jim

Feels lonely here. Everybody else seems to be buying something. I sold some puts after waking up, unfortunately having missed the start of the session when Berkshire was down much more. I never saw such "erratic" Berkshire quotes, jumping every second 1/2% up and down. It's calmer now it seems.

This btw is my general observation: That in times of turbulence that turbulence mostly happens during the first 1-2h and shortly before the end of the trading sessions and that in between it is calmer.

Would make psychologically sense: People eager to sell after Friday's shock are awaiting impatiently the trading session to open and immediatedly sell - with others using that to buy them. And the ones having missed out finally at the end of the session give up, use the last chance of the day and sell below what they had in mind respectively buy higher than what they had in mind.

I bought 7% more actual B's than I sold recently. I occasionally do this kind of thing when there is some volatility...sometimes it works out sometimes barely. Today was a good day. we shall see how I feel in a couple of weeks...

If Trump decides to take a clue from the market (and every economist on the planet) and declares victory and backs off the tariffs to something more sane, ...

Supposedly, "More than 50 countries have directly contacted the White House to initiate trade talks..."

Assuming this is true, then the US will not be listening to every yammering expert on youtube. More likely the tariffs will be negotiated away with every country.


And the EU.
In the news this morning:
"The European Commission has offered the United States a deal to remove tariffs on all industrial goods as part of the trade negotiations, Ursula von der Leyen"

"Von der Leyen offers Trump 'zero-for-zero' tariffs deal on all industrial goods"




Look, nobody knows how this will all shake out. Everybody _does_ know, however, that the US government cannot keep borrowing money forever. And the longer the can gets kicked down the road, the worse it will be when it comes crashing down.
Kicking an addiction is always painful.

It seems that people just get a thrill of delight by running around hair on fire.

The internet, with twitter & facebook & tiktok makes things worse.

Everybody _does_ know, however, that the US government cannot keep borrowing money forever.

I am not one of the everybody who knows that, as I know the opposite to be true. Real debt can definitely rise forever without any problem at all, and generally should. But a country's debt to GDP ratio presumably can't rise forever. The trick is to keep an eye on the gap between the two rates of growth.

Even a quite small move in the rate gap turns a certain foretold disaster into a "oh, look, no prob". Canada was "doomed" once upon a time, around the early 1990s. The national sales tax was rejigged and the problem went away.
I'm not sure whether this link will work. https://cupe.ca/sites/default/files/gdp_en_0.jpg
(CPP and QPP are the net national and Quebec pension fund assets, respectively, and should probably be excluded for this conversation because they are there to attempt to cover known future liabilities, so use the top line). And Canada had no advantages from being the main reserve currency.

Jim

I did some negative buying today, selling off some of the taxable portfolio.
Stuff I bought recently but before 1 month + 1 day. Tax loss harvesting.
Unashamedly market timing, will buy back 1 month and 1 day later regardless of price.

Even a quite small move in the rate gap turns a certain foretold disaster into a "oh, look, no prob". Canada was "doomed" once upon a time, around the early 1990s. The national sales tax was rejigged and the problem went away.

OT but curious Jim on your thoughts

1. US Deficit (not debt) growth is unsustainable
2. Cutting spending is unlikely to solve the problem sufficiently
3. Raising revenues will be required
4. Tariffs will raise revenues


There is absolutely an argument that tariffs are a very inefficient way to raise revenues, but estimates are upwards of $600B "is not nothing".

Suppose instead that the US added a federal sales tax that also generated $600B; would that have been equally disastrous?

tecmo
...

I own scv, for diversification, and Morningstar only goes back 15 years. DFSVX 8.42%, SPY 12.19%.

Since 1926,

Small-Cap Value ret. ~13.4% std.~27%
S&P 500 (Large-Cap Blend) ret. ~10.1% std.~19%

Maybe the factor was still working in the 90s, but 15 years is a long time to underperform by almost 4% CAGR.

I thought I had figured out the key to investing when I read about the SCV effect.

EPD

I am still not buying.
This is comparable to the market decline during Covid.
If you are an LTBH type investor, I believe you will get better opportunities later in the month or the year.

I told you guys.

A wise man once said, wait for a real uptick before you buy. You will miss the bottom but still come out ahead. This wise man is generous with his wisdom, especially on this board.

I also told you guys, bear markets have violent but brief rallies. Again, something someone (don't remember who) posted on shrewd/fool and stuck with me.

10 Year TIPs. Taking advantage of the back-up in rates. 2.17% real YTM today.

The last year and a half or so has been a terrific time to buy all maturities. It continues. I have moved almost 1/3 of my assets into TIPs. Real yields of 2%-2.6%. Basically free insurance against high (more than 2.5%) inflation. All in pre-tax accounts. Just be prepared to hold to maturity.

Unexciting but … if you have won the game, stop playing.

EPD

<<I told you guys. A wise man once said, wait for a real uptick before you buy. You will miss the bottom but still come out ahead.

I also told you guys, bear markets have violent but brief rallies. Again, something someone (don't remember who) posted on shrewd/fool and stuck with me.>>

If you are wise enough to differentiate between a "real" uptick versus a bear market violent but briefly rally, you are all set! Congratulations!

However, if you are not wise enough, you have 2 options. Rely on Jim to tell you when to buy, or dollar cost average.

Compound interest is often praised as the eigth wonder of the world. I think DCA falls into the same league and also deserves similar high praise, at least from the perspective of an average investor. It's easy to understand but surprisingly hard to implement since it requires a great deal of patience and discipline which most investors don't have. I remember div20 used to say on the Fool boards - DCA, sleep well, enjoy life - and I think it's a sound strategy. It may not give you the best result, but you are assured of a good result over sufficiently long periods.

For example, if you religiously DCA weekly between now and the end of the Trump presidency, the average purchase price will most likely be good. Or you could halve the DCA period to between now and the mid-terms, the assumption being more things of consequence will happen in the first half.

If you are wise enough to differentiate between a "real" uptick versus a bear market violent but briefly rally, you are all set! Congratulations!

However, if you are not wise enough, you have 2 options. Rely on Jim to tell you when to buy, or dollar cost average.

Thanks. Congratulations accepted. I know I am wise enough to rely on Jim.

In my unwise opinion, yesterday's bounce was the violent brief rally I had mentioned a few days ago.

It is interesting to speculate what will happen if the tariffs go away or go to 10% on all countries except China. Again, in my stupid opinion, the uncertainty will keep spooking the markets and they will continue drifting lower into bear territory. If and when they do, I will come back again and say I told you so. Let's say six months from now.

Too many people here are only interested in knocking others down a peg, without considering the underlying message.

Too many people here are only interested in knocking others down a peg, without considering the underlying message.

You are misunderstanding. I agree with your post and I wasn't knocking it down. My intention was only to sing the praises of dollar cost averaging for mere mortals who don't know how to build a bottom timing tool!

You are misunderstanding. I agree with your post and I wasn't knocking it down. My intention was only to sing the praises of dollar cost averaging for mere mortals who don't know how to build a bottom timing tool!

My bad. Agree with the general goodness of DCA.
I don't know how to build a bottom timing tool either, but I know Jim knows and that's good enough for me.

However.... not to get woo-woo but sometimes, unreliably, "gut feel" works (or can be completely wrong, it's not a science after all). IIRC George Soros's son said (paraphrasing) "forget my dad's explanation of his methods. The way he knows he has made a bad call is when he gets back-aches and starts complaining about everything."

Anyway, I am not in Soros's league but it just feels like we are still quite a ways away from the real bottom. Maybe it's the general malaise affecting my country, maybe I am subconsciously parroting Jim and others and thinking its my gut feel. Regardless, I am not buying yet. And before someone trots out the Peter Lynch quote, I am fine giving up some gains just to feel happy about buying when I do (probably when the market is 20% higher than now!)

You are misunderstanding. I agree with your post and I wasn't knocking it down. My intention was only to sing the praises of dollar cost averaging for mere mortals who don't know how to build a bottom timing tool!
...
My bad. Agree with the general goodness of DCA.

The habit of long term incremental investment in US equities has been an extremely successful strategy, perhaps the very best one, for a very long time, for a variety of reasons.
And yet...
It is certainly worth considering that not all of those reasons may still obtain, and that the strategy may no longer be the best one.

Ignoring news developments, consider that much of the long run benefit of US equities has come from the rising trend in stock market valuations for many decades. If trend earnings yields can fall at (say) 0.081% per year for 110 years (the on-trend normal P/E rising from 8.3 to 30.8) as they have, what law of nature shows they couldn't fall on trend for the next 110?

I certainly would not bank on a continued rise, which is the implicit assumption built into models looking at historically average returns and trying to extrapolate them or make estimates of optimal equity weightings.

Jim

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