Juan, I appreciate your input on this. I remember the "lost decade" (the first decade of the new millenia, 2000-2009. In which the S and P 500 basically broke even for that time period. And another big decline (like the two we had in the 2000s) could occur again, or at least a 10% correction which is overdue. On the other hand I am really glad I stayed in and added to my portfolio the last few years as the gains have been tremendous. (which I would have missed had I not been in). Believe me, I am capable of pulling the trigger in getting out, but right now Im in 80%.
"And another big decline (like the two we had in the 2000s) could occur again,..."
Not "could" igg, will. The question is when. In 5 months, 5 years, 50 years? My bet is more than 5 years and less than 50. The correction, yeah, overdue according to historical time terms, but overdue due to current market conditions?
Are we overbought enough to say a correction is overdue off valuation? Not when you figure in what we can get in the bank imo. With a market p/e around 17 1/2 and a still growing average earnings figure for the companies, all we have to do is churn around a bit to bring that p/e back a bit closer to the average 15. That average 15 is what we got when we could get 5% for our bank passbook and around 6%, give or take a %, for a 10 yr treasury.
So many are unwilling to let go of nly and agnc because they don't want to lose the divi. I don't know whether they will turn out to be correct or not, all i know is there's heightened risk. I wouldn't settle for that divi to remain at the same % it was at given a heightened risk scenario, i'd want the % adjusted higher, and i mean higher after the divi cut coming. That means a lower stock price than the bulls are looking for. But that divi. Like moths drawn to a candle. And it may be enough to keep the stock price up. They may simply accept the heightened risk and not demand a higher return. Who knows? That's the market.
The market as a whole offers a much more stable financial setting than do the mreits. So, it doesn't have to offer near as much to attract investment. Maybe doesn't have to correct any time soon, and when it does, maybe to satisfy the players it has to correct only the average 5% to 6% that comes along much more frequently than does a 10% or more correction.
Iggy: You're a friend so I'll put this as lightly as I can. Remember how unbelievable CGMFX was. I was making 20 to 30 thousand almost every day..overall I had watched it put hundreds of thousands into my pocket..Then remember what happened...almost overnight (I dropped more than a quarter million).
There's an old cliche' which says, "When the elevator boy gets in, it's time to get out"/Regards/Juan
Iggy: I'm sure you understood what I was talking about. I got in CGMFX in 98 by researching and I came to believe that it was going to do well. I'm not always right, of course, but I was in that case. It took off like a rocket and most of my money was made in the "End-of-Year" Distributions which rolled over and bought more shares. by the time I got out in 2009, the share price was down, but I had more than 4 times as many shares as I originally bought.
Then in 2007, he brought around 80% in and that's when all the elevator boys bought in (Many of them still here hoping) What I see in the market at this time is pretty much what we were seeing in 2007..Money just pouring in from everywhere..That's generally the signal to cut and run..BUT BUYING IN..IS FAR, FAR, FAR, EASIER THAN BAILING OUT WHEN THE MONEY IS COMING BIG TIME..That's what the Ponzi Scheme was born of/Regards/Juan