What about that stock market!

[Rogar]

I am a conservative investor, but have stubbornly held on to some indexed stock funds through thick and thin, which up until last year was mostly thin. The last couple of years have given a pretty decent return and I think this year alone returns are up around 15% for just the first few months of the year. Now, when I look back at five and ten year returns, they don't look too bad and maybe are returning to a mean growth rate.

Now I'm starting to wonder what bubble will be next? It seems like that is nature of the cycles and it is time to rebalance into something more conservative, which unfortunately means low interest rates. I'm also thinking it won't be long until interest rates will edge up, but that's anyone's guess.

Anyone thinking similar thoughts? Has the recent uptick increased your confidence in the market any?

[iris lilies]

I've been enjoying the ride, that's for sure. I don't have more confidence in the market from this, though. But I'm still dollar-cost-averaging into funds.

[pinkytoe]

I always sense that it is the big guys like hedge funds who are pulling all the purse strings and manipulating markets. Right now, they are buying up properties left and right in my city thus increasing REIT profits. I don't have a good feeling about it once this little boomlet is over.

[ApatheticNoMore]

It may well be a bubble. But what are you going to do, try to time the market? I mean it's not like I'm at an age where getting more conservative investments would be natural so pulling out would be an attempt at pure market timing (and meanwhile while trying to market time, money would be sitting around earning less than 1%). Unless you are just talking diversifying and not having all your money in stocks, which of course makes sense. Personally, I'd rather keep just 25% of money in stocks if that's all I was comfortable with and *keep* it there than try to market time.


I always sense that it is the big guys like hedge funds who are pulling all the purse strings and manipulating markets. Right now, they are buying up properties left and right in my city thus increasing REIT profits. I don't have a good feeling about it once this little boomlet is over.

That's true of course they are playing the whole real estate market around here also, so housing is bubbly too. I think it goes beyond any existing REITs which historically have mostly been non-single family houses right? Most of the single family housing they are buying up hasn't been financialized yet (into REITS and other financial instruments), but they definitely hope to. And bonds will crash if interest rates ever rise.

[SteveinMN]

It may well be a bubble. But what are you going to do, try to time the market? I mean it's not like I'm at an age where getting more conservative investments would be natural so pulling out would be an attempt at pure market timing (and meanwhile while trying to market time, money would be sitting around earning less than 1%).
Timing the market is a fool's game. Even the folks paid to spend 60-80 hours a week to do that don't always get that job done. And, as you pointed out, the alternative in ready-access instruments (savings, CDs, money markets) offers almost no gain and bonds are "bubbly". In a sense, I think that's going to push the market further up (not many other places the money can go). But it also disguises the fact that real economic growth is far behind the stock market's recovery -- hiring and spending in industries outside a select few is still weak and many DJIA companies are deriving significant/most of their income from outside the U.S. In time, reality will catch up and we'll see another market correction.


[...] housing is bubbly too. I think it goes beyond any existing REITs which historically have mostly been non-single family houses right? Most of the single family housing they are buying up hasn't been financialized yet (into REITS and other financial instruments), but they definitely hope to.
I suspect that REITs accustomed to buying apartment buildings, office buildings, and industrial parks will soon encompass masses of single-family homes as more people choose to rent those properties as well. Makes perfect sense to me.