Posted on 01/02/2020 1:20:44 PM PST by SeekAndFind
Stocks are lurching toward fresh records to commence the first trading day in 2020, but that advance has raised some questions about the run-up in values for broad-market U.S. equity benchmarks.
Indeed, the S&P 500s recent gains have taken it to its priciest level relative to its hourly cost for the average worker on record.
By that measure, Tuesdays climb by the S&P 500 SPX, +0.84% to a peak at 3,250.04 would mean that the average employee, at an hourly wage of $28.29, would need to work 114.88 hours to buy a single unit of the index, representing one of the loftiest levels on record, according to data from FactSet and the U.S. Bureau of Labor Statistics.
Data from the Federal Reserve Bank of St. Louis estimates that the average worker needed to work a record 109.75 hours, based on its most recent employment data, as of Dec. 6 (see chart below):
A tweet by financial commentator Holger Zschaepitz, using the New Years Eve closing price for the S&P 500 at 3,230.78 and an hourly wage of about $25.71, drew more than 630 likes on Twitter as of midday Thursday, highlighting a record number of hours of 125.6392 for a share of the S&P 500.
(Excerpt) Read more at marketwatch.com ...
feeling that a correction is coming soon
For years I had that feeling and was ultra-cautious invested way too much in fixed income when I was young, moved too much money out of equities in the big downturns, and got back into equities way too late.
It took me a lot of years to realize I couldnt time the market and I just had to ride through the waves. The stats on how poor your returns get if you miss the upticks from the bottoms are sobering.
It takes a lot of steely nerves to ride through the downturns, especially when you retire.
Retirement is largely a crapshoot in that, if you retire at the start of a serious bear market, you are screwed. Conversely, if you retire during a bull market, you are made. So much of your retirement situation depends on how well the markets do during your first two or three years of retirement.
We believe in what Trump is doing and actually just increased our retirement equity exposure from the mid 30% range to the mid 40% range a month ago.
The stock market has gone up about 7% a year over the last 48 years. The median income has gone up about 4%. Of course the unit price has gone up.
I’m 60 this year and this is my allocation:
Fixed Income
- 20% Domestic
- 15% International
Equity
- 10% Large Cap Growth
- 20% Large Cap Value
- 15% Small / Mid Cap
- 20% International Equity
I purchase 3 ETFs for each, putting 50% in the best performing ETF from the previous year and 25% in each of the other two ETFs which ranked somewhere around mid pack.
So as an example, if your portfolio is $100,000, then you would invest $20,000 by buying 3 Domestic Fixed Income ETFs, the first one would be $10k and the other two would be $5k each - - wash, rinse and repeat...
I started off timid but got agressive the last 5 months...ended up with 24%!
I agree, I am ten years into retirement and I just last month readjusted from 60 40 to 50 50 as Trump’s first three years ran the stock market side up quite a bit.
I actually expect 5 more years of good market because the trade balance will be signed and the deal with Canada and Mexico and soon Britain will enhance business around the world, Will even be good for China.
Now we still have to be a bit concerned about international relations.
Yes, don’t push your luck, but at 50 50 your portfolio is balanced and the market must always be part of your strategy.
“And this headline puts this in a negative light WHY???”
To distract you and like-minded others that despite the great stock market, how many people still have to work more than 4 months to just pay their federal and state income taxes, and property taxes?
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