This time, I'm not talking about stock. I'm talking about me, you and any investor on earth. We are the people who might bought stocks this year. We are the people who should ask- would i pay higher price on my purchases this year? be gentle with you with your answer. My guess is that most investors on the win side this year. So, is it a good play for the regular investor? i don't think so.
Here are some highlight:
We are talking about the best year performance in 10 years for the sp500.
PE ratio for the main indexes are far above the average points.
No good news or bad news is in the air. So driving is missing for the market.
Earning growth rate slow down this year. for the SP500 we are talking about 3.5% until June, so lets assume 7% this year. this is far bellow 12% average growth rate in EPS.
All the financial and employment issues are familiar. i don't need to explain that. But what i think is that: BE CAREFULL.
Despite companies are doing well, the stock prices are high. remember that fall comes when nobody suspects and when everybody earns. this are this days.
Go to your portfolio, check deeply what fairly priced and what is not. In which stocks you have more confidence then others. what is the possibility of 10% reduction of this stock price? just ask yourself.
I'm not saying that hard times are coming, I'm just saying that quick fall can come, this could be 5-12% in 3 or 4 days. Just to balance the prices again, crack the optimistic feeling we so love.