Home Forums Members Forum Bull or Bear market?

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  • AvatarChris Waldemer
    Participant
    Post count: 17

    Hey Sean – in your weekly video you mentioned that the fed cannot prevent the bubble from popping… to believe the fed has got a safety net under the market and the market can’t decline is a falacy.. fed can help undergaurd a bull market when its still in a bull market phase but cannot prevent a bear market from happening and history has proven that.

    Since the FED stimulus and bond buying spree has seemed to underguard the market after the 40% decline in March would you consider we are still in bull market then or are we now in bear market? It appears to me we are still in bull market and with further talk of stimulus (I realize this may not happen and talk is cheap) I could see this market continue higher for longer even though its overvalued. I’m sitting on the sidelines in 401K 100% in cash. I’d like to think that I could take 25% of that if you figure we have 6 more months of going up. I could see that happening for a couple of reasons… Vaccine/Further stimulus. Thoughts? Or best guess where this goes based on FED further stimulating/Vaccine/Election results?

    Mark FisherMark Fisher
    Participant
    Post count: 35

    Hey Chris,
    I’m no Sean Hymann, but, what are you doing at 100% cash? thats nuts to me. Bull or Bear market you’ll make money with Seans system. We really don’t look at the markets except playing the broad market today, that’s risky. I’m sitting at 8% cash which is really to low, but, I’m just about fully invested. But I’m sitting on 90% of Sean’s picks with almost all have 3 traunches and smiling like a Cheshire cat. CAJ is at a low, why aren’t you in it? SLV is a defensive play against high govt debt, money printing, rising inflation, why aren’t you in it? thats just 2 plays you should be in. Bull or Bear we make money!

    AvatarChris Waldemer
    Participant
    Post count: 17

    Hey Mark – 100% cash in 401K. My 401K only allows me to buy certain specific funds not individual stocks.

    BekkaBekka
    Participant
    Post count: 277

    Yeah, that’s the downside of 401k’s. Ours was mostly all mutual funds and no choice of a metal type (gold or silver). We are retired now, so no 401K. I think it is smart that you are 100% cash. Keep patient.

    ThankfulThankful
    Participant
    Post count: 271

    The financial media is all about stimulus and why the market can keep going up. The truth Sean has shown us is the market is extremely risky and overvalued. The reason that stimulus is even being discussed is because of how bad things are. Agree with what’s been said here about 401ks. My wife also is 100% cash there because of the limited choices. So sure, the market could continue to go up. Do you want to take that risk? As long as you’re aware of the risk you can make a sound decision. Sean is arguing caution on the overall market, but he also says there’s no telling when it will drop.

    Mark FisherMark Fisher
    Participant
    Post count: 35

    Chris,
    I understand now, yea, you need to to roll that 401k into an IRA or Roth IRA so you can control it. I had a 401K through my employer and gain about 4-6% a year, when I left the company, transferred it to an IRA that I control. Through Sean’s help, My IRA has been averaging about 22-27% growth. Chris, I do understand where your coming from, and it sucks not having control of your assets.

    AvatarChris Waldemer
    Participant
    Post count: 17

    Mark – unable to roll it because I am employed with that company that sponsors the 401K. There are a couple of key questions within my original ask to Sean. I’ll see what he says. Thanks.

    Jeff WJeff W
    Participant
    Post count: 202

    I’m in a 401k as well 100% cash right now or bonds and I can’t control it because I’m employed as well it’s kind of a pickle but I’d rather be safe than sorry. Also I can only make moves limited times per year so I’ve got to wait for a period of time before I can switch again. makes for slow moves. But I see the market is so over valued that I’d rather re-enter when things drop.

    Sean HymanSean Hyman
    Keymaster
    Post count: 4605

    No one knows when the grossly overvalued and risky market tops. It could be today, next month or next year. One can’t know when the top is but one can always know how high the risks are. If it were me, I wouldn’t be risking 25% of my 401k in overvalued assets.

    The Fed can’t stop bear markets. The Fed had been stimulating before the market fell 30% in 30 days. They couldn’t prevent that. They couldn’t prevent the bear markets of 2000 and 2008 either, etc. History proves that.

    So, it’s why you buy something because the company itself is solid and the company itself is cheaply valued, rather than hinging things on the Fed saving everyone. It’s a false belief that people have.

    At the topping phases of waves 5 and B, the sentiment is never more bullish and people think stocks can’t go down. Yet, that’s when the have the highest risk that they may fall.

    There are numerous ways to gauge bear markets. One widely held one is when the market drops over 20% from its top, they consider it a bear market and not just a corrective pullback. By that definition, we just had a super-short bear market in that last/latest crash. I don’t personally gauge them that way. For me, when its trending up, its a bull market and when its trending lower overall, its a bear market. Real/true bear markets aren’t typically just a quick blip on the chart, like we saw recently.

    So, one could argue that we’re still in a bull market and one could also argue that we had a bear market for about 30 days or so and went back into a bull market. To me, when the “real one” comes, you won’t have to guess about it. It will be as clear as the nose on our faces. The volatility is just increasing and that tends to happen a lot in toppy periods.

    Bottom line: These are not the conditions where I’d want to risk 10% of my 401k, much less anything higher. The long-term chart screams high risk for those noting the signs. So I’d stay out of it, if it were me.

    I love the conversations over the weekend. I’m glad you all are interacting then. Totally agree with Bekka and Thankful.

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    Sean HymanSean Hyman
    Keymaster
    Post count: 4605

    Chris W., it’s because of these market risks (risk of sell-off due to market overvaluation) that I wasn’t going to encourage you to put 25% of your cash to work in an overvalued, super-risky market. The market is as overvalued today as it was in the crash of 2000.

    AvatarChris Waldemer
    Participant
    Post count: 17

    Thanks Sean. I made no changes and still 100% cash in 401k.

    Sean HymanSean Hyman
    Moderator
    Post count: 2933

    Glad to hear it. I know when markets are rallying, it doesn’t seem like there’s huge risks, but there are when it’s at a massive state of overvaluation like it is right now.

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