As we find our Total Portfolio Solution holding 50% cash right now waiting for better opportunities, let’s take a few minutes to reflect on current market valuations:
Some people might look at that and say: “There’s been two other times in history where valuations were this high.”
Some others might say: “There’s ONLY been two other times in history where valuations were this high.”
What a difference that one little word makes, and not to paint too grim a picture here but we should not forget how the peak in 1929 and the peak in 2000 ended. (insert epic crash sound effect)
I don’t bring up valuations to say that an imminent crash is coming, that’s not what it means. And remember the famous John Maynard Keynes quote: “markets can remain irrational longer than you can remain solvent” so we won’t be front running anything here. This may last a while longer.
We’ll remain nimble and certainly be ready to move to safety positions on a one day notice, but we don’t front run the markets. We’ll continue to go where the data points.
But valuations matter a lot when trying to estimate forward return. The lower the starting point, the higher the expected return will be, and vice versa.
Given where we are now in the high 90’s percentile, it’s hard to imagine the average investor being pleased with their forward performance. With stocks at all time highs, and interest rates at all time lows, we’re going to need some out of the box investing to be successful. Thank you all for joining me on this journey.
Want to see our current positions and daily trade signals?
Consider Subscribing – Free 2 week Trial for all subscriptions
Sign up for the Awesome VTS Newsletter – Free 1 month access
The Volatility Advisor
Making volatility investable through education and active management
Start your FREE 2 Week Trial Now
Gain full access to all 4 of our successful trading strategies for a full two weeks, absolutely free.
It's time to start growing your retirement fund