As I may have mentioned a time or twenty, I'm not a big fan of basing investment decisions on one's "macro view." Such an approach would appear to be anchored in logic. The first step is to establish your macro view of the world. In other words, you first decide what is likely to happen to the economy, interest rates, inflation, stocks, currencies, commodities, etc. Simple, right? And then from there, you invest accordingly and wait for your thesis to play out. That's how Paulsen made his billions, right?
My problem is that I can rarely predict what one market is going to do next week, let along figure out what a slew of markets are going to do over the next year. Sorry, but I'm just not smart enough to pull this off. (And that darn crystal ball of mine is in the shop again!)
Exhibit A in my
The prevailing wisdom in the market today is that stocks, collectively, are expensive and that a "sizeable correction," however one wants to define one, is needed and/or forthcoming. While I won't belabor you with current and backward-looking quantitative data to prove the point, let's just agree that the market is trading at a valuation ratio in excess of what might be considered average.
While the market could be considered "pricey" on a historical basis, a look at the "doubling" performance of SPY (SPY) over the past five years evinces a rather orderly upwards move following our nation's near financial collapse in 2008-09.
SPY - 5 Years
This would contrast with the hyperbolic buy frenzy that occurred in technology, Internet, and growth stocks in the late 90s. The Nasdaq 100 Index made a 7-fold move in 5 years, subsequently losing 75% of its value in less than two years. History tells