Skip to main content

How to invest when the market is at an all time high?

August 22, 2024

How to invest when the market is at an all time high? 

The S&P 500 has risen 50% so far during the Biden administration. The S&P 500 is up 65% in the last four years. Today, as the Democratic party looks to make history by nominating for the president a woman with high chances of becoming the first woman president of the United States, the stock market finds itself at an all time high. 

What is the best investment move at this time? 

We don't know, but have a few suggestions. For long term investments such as your 401k, stay invested and do nothing differently. Keep buying, keep investing. Buy into the stock market regularly every month. Go for dollar cost averaging because no one can time the market. The long term bet is that there will be ups and downs, but that the stock market will continue increasing in value over time along with inflation. 

Diversify your investments. For that portion going into stocks, put most on on a low fee exchange traded fund (ETF) that matches the S&P 500 such as the Vanguard S&P 500 ETF (VOO). Put some on a low cost international ETF such as the Vanguard Total International Stock Excluding US ETF (VXUS). 

For short term investment accounts (your play money account, if any), consider going into cash for now. Wait for the market to come down; wait for value investing opportunities. Learn from Warren Buffett who's been stashing cash away waiting for better opportunities. The opportunities will come soon. They actually come out almost every day for one reason or another. For example, a few weeks ago, Nike reached over 60% off from its peak. We advised to buy some just to see what would happen. Well, it has gained almost 18% since then. 

Buy low. Sell high. Don't lose money. Those are the three keys to making money. The market is at an all time high. Buying low is hard these days. Selling higher will be hard and losing money is very likely if you buy at today's prices. It is almost impossible to buy low when the market is so hot and potentially over valued. Wait for the AI bubble to lose some air, and come back into the market. There will also be opportunities to short some stocks soon. NVIDIA, for example, is once again approaching unsustainable bubble territory valuation. Once shares get to $140 again, it will be time to start short selling NVIDIA again. 

In sum, patience is a virtue. Stay committed to long term investing, leveraging dollar cost average. There will be impossible to time ups and downs. In the long run, expectations are that the market will continue climbing up gradually beating, or at least keeping up with, inflation. 

Putting money under the mattress is not a good option in the long run because inflation will eat the value of that money and you will miss out on market appreciation. Even the Bible advises against burying your talents instead of investing them. In the short term, however, hoarding and saving cash waiting for  good values is the way to go. Prices are inflated and too high now. 

To everyone's surprise, the Democrats' "open border" economy has proven to be a remarkable success for the stock market. The recession that every dam expert was convinced would be inevitable in 2023 never materialized. It will come one of these days, but is not here yet. 

The AI boom made the stock market great again. That is good for current investments, but makes it hard to find new ones at good prices. Patience is a virtue. Grow it today so that you can harvest better deals tomorrow. Sooner or later, good opportunities will materialize. Don't be a victim of the fear of missing out. The current AI-driven valuations are bubblicious and will come down. A market correction (20% drop) in technology stocks and the overall market will come sooner or later. Be patient. 

The more you know, the better you suffer. Life is pain. Intelligent life is pain management. The solution to life is death, but wisdom is knowing which problems to solve and which ones to ignore. Live well. Enjoy. Die better. 

www.creatix.one

Comments

Post a Comment

Popular posts from this blog

When will the Tesla bubble burst?

December 11, 2024 When will the Tesla bubble burst?  We don't know Fools rush in. It's impossible to know exactly when the Tesla bubble will finally burst. Unfortunately for us at Creatix, we began shorting Tesla too soon. We are down almost 40% on our position as of today. We are not fooling ourselves thinking that we were ever make money on the short position. We truly doubt that Tesla can go down 40% any time soon.  We would love to add to the short position, but it would exceed our $3,000 limit on the stupid bets that we do for fun. We're not Mr. Beast. We have a very limited budget for ridiculousness. We would love to short Tesla tomorrow morning at the ridiculous share price of $424. Tesla is trading at an incredible 116 times earnings, which gives Tesla a market capitalization of $1.32 Trillion. Elon Musk added today $13.4 billion to his fortune. Yes, $13 billion in one day. Yesterday, he had added $11 billion. Yes, that's $24 billion in 2 days.  Six months ago, ...
Post a Comment
Read more

What is the best deal for Panama?

February 1, 2025 What is the best deal for Panama? Trump wants the American Canal in Panama back. What should Panama do?  Panama should lease the canal to the United States. Panama can then hope that a future president can end the lease or renegotiate it in the future. Panama earns about $5 billion a year operating the canal. Panama should negotiate a lease with the United States that allows Panama to either earn or save about that amount per year. The lease may call for improvements to the canal paid by the United States. The lease may call for other economic concessions to Panama such as a special trade agreement, tariff exemptions, direct U.S. investments in Panama, fintech and cryptocurrency deals, etc.  Panama should see Trump's interest in the canal as a blessing in disguise and as an opportunity to enter into a strategic money-making deal. Panama should not see itself as a victim. The truth is that the United States built the canal and that the United States freed Panam...
Post a Comment
Read more

Are we closer to World War III after Assad's' fall in Syria?

December 8, 2024 Are we closer to World War III after Assad's fall in Syria?    Well, yes because World War III will be in the future and we are always closer to the future. Now, that future has not been created yet so it's impossible to predict it with full accuracy. Whether the world moves into WWIII after Assad's fall will greatly depend on what Putin decides to do. After all, Assad is hiding in Russia from where he could try to organize a come back. We should all prepare for WWIII. Sooner or later WWIII will be real. Perhaps we are already at the initial stages and have not realized it. a WWIII will most likely bring significant human suffering and significant technological advances. Who will win, how will WWIII play out? No one knows yet. The future has not been created yet.  In this post we take a quick look into Syria's history including who is Bashar al-Assad, and what may happen in Syria and the region now that Assad's regime collapsed and the dictator is i...
Post a Comment
Read more