Gary Lucido

The Markets Have Spoken: They Say 'Bear'

Well, I don't buy all the "cycle" arguments but I do agree with the basic premise that we are in a bear market. It should be no surprise that the market is falling and you should be prepared for it to fall further. There is a rather compelling case made by Robert Shiller, and supported by some really interesting data, that the market is tremendously overvalued. On a trailing earnings basis the P/E of the market doesn't look that bad but we have been in an earnings bubble. So it's a lot worse than people think.

I summarize some of the arguments in an article here:
www.investingminds.com.../
which makes the case for market timing. Though I'm not a market timer in the sense of moving 100% in and out of the market I do think it makes sense to modify your asset allocation based upon valuation.