In July of 1999, the S&P's earnings yield was 3%. The 10-year bond at that time? Roughly 5%. Today the S&P earnings yield is ~2.6%. The 10-year bond? 1.1%. We are nowhere near as overvalued as we were in 1999.

While not being as overvalued as we were in 1999 is really not a hard bar to pass, I do think it is worth mentioning as the "gravity" of both situations are entirely different.

So are we in a bubble as a whole market? Not really. Sure, we are overpriced by roughly 15-20%, (based on how I assess it) but if your outlook is beyond 10 years, it is very smart to continue to buy. And if the market dips? Buy your favorite companies at better prices.

I'll close on this: if one could correctly time the market, they'd be a trillionaire. Buy VOO if you don't know how to value stocks, and if you do, shoot for a 5% yield as your cut-off, and you will do just fine over time.

Submitted January 21, 2021 at 07:22PM by forestroad179 https://ift.tt/393Qwyn