Here is my warning to S&P 500 index investors in 2022. In 2022 I am seeing people piling into index funds in the same way they did for tech stocks in 2020. This is chasing past returns and elevating valuations to unsustainable levels. Here is my full analysis and S&P 500 prediction for 2022.
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Thanks Nick
QYLD gang checking in! Thanks for this information, Nick. I really appreciate your insight. I also hold VTI and VXUS, so I will keep an eye on this situation moving forward.
Hey Nick! Great Insight, but I still think broad market index funds are the best play for the long haul. I’ve been waiting for a buying opportunity for a while lol
The catch is that I’m unsure where to put my money instead. The yield on bond ETFs lags–a lot–and both the Dow Jones and Nasdaq show similar overvaluation problems.
That’s the problem contributing to this greater problem
Yes, you are right, valuations are way too high. Historic average is 20, imho that’s slightly too low, l expect around 22-23 should be ok for the coming years, but again : now it’s too high so we will cool down this year. So pending questions: can companies increase their prices ( bc if inflation), if they can it should be more or less ok. So l stick partly with value stocks which l think are strong enough and have pricing power. Furthermore, l write calls on my individual stocks and as of today l also write call in my etf’s. Yes, l can leave the market but l bought some protection. Time in the market is more important than timing the market.
Bottomline: if the market dumps l will buy back my written calls and buy more in the dip.
I like this approach
Beginning last month I decided to go with more sector focus etf on my Fidelity instead of index 500 heavy, even my individual buys in utilities and energry are showing significant gains in the last 4 weeks, to be honest I haven’t even bought into some stocks because they are way over book value, some of these I stopped purchasing back in August September tine frame.
I can see the first half of 2022 being really difficult as an investor. I’m still going to DCA through this mess. Long term we will be alright.
add PSQ and/or SH while you DCA back into SPY. market is going to at least drop back to Jan 2020 levels. make money on the way down
I see your logic.
Great video – so the next question would be…. What do you invest in instead?
Keep an eye out for one of my next videos covering this topic
Great Content! Thank you for your effort!
My pleasure!
There’s bound to be a correction at some point, but without knowing where the high point is, if you want to invest it’s still a great place to do it. If you dollar cost average every month, and keep buying in once it corrects, the rebound will be shorter than if you buy now and just hold.
The problem most investors have, is that they buy when things look good, then something bad happens and then sell. IE – they’re just reacting, and don’t have a strategy. If you follow your strategy, you’ll be OK.
If you’re scared, get a financial advisor to help you, or even a robo-advisor. Those fees are relatively low compared to either not investing (and losing money through inflation) and/or investing on your own with no strategy and being very reaction driven.
Yeah… 30 years… fairly short… and even then. Japan 1989. They’re still upside down putting money in at the top 32 years later.
But hay it’s up right… right?
Nick I agree and I have been saying this for a while. I want to get into qqq and voo but this has stopped and currently I’m just invested into schd, vym, vymi
Time in the market > timing the market.
As long as your time horizon is long enough, just keep DCA every month and every year, and you’ll end up fine.
The S&P gives a average return of 10% per year. Therefore if it’s achieved 30% then it’s likely it’ll sell of or have a few years of sideways movement. Personally I’m in for 20+ years.
A large scale recession will happen soon. Only we don’t know if it will be this year or next or the following
Totally disagree with this analysis. The companies in S&P 500 in 1950s is totally different from its unique composition today. Today S&P 500 is very tech, Biomed, AI and Robotics driven. They can scale with less brick & motar in their assets.
I expect the market to decline and remain flat for quite a while. That is why Invest in 2 broad market index funds that representsent the market. When the market starts to climb in 10 to 13 years I will have, for the long term, bought a lot of shares. SP 500 is a long term fund.
I love newbies who start out their videos that they have been investing for 7 years. I have been in the market over 40, so yes you are correct. The market is likely going to have a down year. You have two choices then. You can try to time the market, or you can DCA and therefore be getting shares at a discount. My experience is maybe lightning up a bit, can make sense, but trying to time is foolish.
Hopefully some day I too can achieve grand master status!
its good time invest, no matters if price drops or not, because its all bout long term and should invest every month