≡ Menu

Should You Invest in the Stock Market Now?


Should you invest in the stock market now?Should you invest in the stock market now? The stock market is at an all time high and most stocks seem too expensive. This is a conundrum to new and experienced investors alike. Nobody wants to buy stock if it’s going to crash 30% in 6 months, right? On the other hand, the stock market might continue to go up for the next few years. I don’t want to miss out on that gain. If you look around on the internet, you’ll see articles as far back as 2011 telling investors to pull out of the stock market. The S&P 500 index has doubled from that time and we’d be a lot poorer if we followed that advice.

Personally, I’m nervous about the stock market. It has been on a tear for many years now and we are due for a correction. Like an earthquake, a stock market crash will happen. It’s just a matter of time and magnitude. In times like these, we need to look at the fundamentals and see if investing is the right move for each of us. After that, we’ll go over a few scenarios.

The fundamentals

Will you need the money?

This is rule #1. If you will need to money in the next 5 years, don’t invest it in the stock market. Set that money aside in a safe and easily accessible account before you even think about investing in the stock market. If the stock market drops and you need the money, you’d be forced to sell at the worst time. On the other hand, if you can wait it out, your investment will most likely recover in 5 years. This is a particularly good strategy for index funds. Individual companies might not come back, but the whole market should do fine in the long run.

Will it impact your overall strategy?

You have an investment strategy, right? If you don’t know what I’m talking about, then read up on asset allocation first. You need to figure out how much volatility you can handle. A lot of investors sell when the stock market drops and that’s exactly the wrong reaction. You need to buy more when stocks go on sale. Once you figure out your target asset allocation, you can use that as a guideline and stick with it through thick and thin. If buying more stocks will screw up your target asset allocation, then you probably shouldn’t do it.

Where did the money come from?

Where did you get this money to invest? Was it invested in the stock market before? If so, then it’s probably best to put it back in. For example, our dividend income is generated from the stock market. We’re not using it yet so it’s best to reinvest this income. This is particularly important for someone who received a lump sum from their pension. They will be very nervous about investing, but it was already invested before, so the money really should goes back to being invested.


Young investors just starting out

This one is a no brainer. If you are a young investor and just starting out, then invest as much as you can. At that point, your saving rate is much more important than the rate of return. Young investors also have time on their side. Even if the stock market crashes, you will have plenty of time to recover. In fact, young investors should hope for a big crash. That’s the time to buy and it benefits them the most. Just keep investing if you’re in your 20s and 30s.

I almost forgot. Young investors need to have an emergency fund stash first. This can be 1-3 months of your living expenses in case you need to fix the car or something like that. Don’t put everything in the stock market. Also, pay off those high interest debts before you invest. You can’t beat the credit card interest rate with stock market investing.

Experienced investors getting nervous about the stock market

This is us. We’re in our 40s and we have over a million dollars invested in the stock market. Most of this is in low cost index funds. A portion of it is in our dividend portfolio to generate usable passive income. In this situation, I need to review my risk tolerance and target asset allocation.

Our target asset allocation for bonds is 20%, but it’s at 17% now. We need to rebalance and bring the bond allocation back to target. Here is our target asset allocation.

asset allocation

Once we’re back to our target asset allocation, then we will keep investing like this.

  • Dividend income – Reinvest in dividend stocks.
  • Automated investing – 401k. Hands off here. Automated investing has been working very well for us and we’ll just leave it alone. We’ll continue to max out our 401k every year until we can’t anymore.
  • Extra savings – This is the extra savings we have after automated investing and paying the bills. The amount is actually very little relative to our net worth. Last year, we saved about $11,000. This year I’ll probably invest some in dividend stocks and add to our cash reserves.
  • Other passive income – Reinvest back into that asset class.

Investing at this point should be relatively easy for people in our position. Most of our net worth is invested and we just need to stick to the plan. The main thing we need to do is to keep investing and rebalance our portfolio once per year. We still have plenty of time before we need to draw down a significant portion of our investment.

Keeping to the #1 rule, we are investing the money that we don’t need in the next 5 years. Mrs. RB40 plans to retire by 2020 and we have enough cash cushion for the first 2 years. We will increase our cash target allocation to 3 or 4% once she gets closer to her retirement date.

Recently retired reader

I am a 60-year old recently-retired, high-school teacher. I am receiving a pension, which has no COLA (cost of living adjustment).  I opted to withdraw my contributions with 4% interest & now have a lump sum to invest.  It was just deposited into a Vanguard money market account, so that I can easily & quickly buy into my 2025 Target fund (where I have a balance equal to about 10% of my lump sum). I am nervous about moving all of it at once, especially with the unknowns with our president.  My plan for this money is to hedge increased future costs, especially medical ones.

I got more information in a follow up email and currently, her pension and her husband’s income pay for all expenses. Since there is no COLA, this investment will help cover inflation and future medical expenses. They plan to take Social Security benefit in about 10 years.

In this case, I would go ahead and invest the lump sum in the 2025 Target date fund. The money she withdrew was probably invested so I think it is fine to put it back to work. The 2025 target date fund has 65/35 stock bond mixture. The stock portion will decrease every year so there will be less volatility as they get older. It is a good idea to figure out their target asset allocation and see if the 2025 target date fund has the right mixture.

From what I understand, they will continue to add to their investment in the next 10 years and won’t need to withdraw. That’s plenty of time for the stock market to recover even if we see a crash in the next year or two. I think she should go ahead and put it in the 2025 Target fund and don’t worry about it. If she needs to use some of the money, then she should keep that portion in cash.

Do you have any advice for our recently retired reader?

70s and drawing down

Mrs. RB40’s father is in his early 70s and I haven’t seen his investment account in a few years. I really should check and see what he has in his portfolio.

Right now, he’s busy with his rental home in California, and working on solving a tenant problem. They haven’t paid rent lately. Once that’s done, he’ll be in a better position to sell the place so he won’t have to deal with being a landlord anymore. At this point in his life, he should be able to relax and not worry too much about investments.

He has a pension, social security benefit, and retirement savings so his finances are very good. His portfolio should be mostly in bonds and other stable investments. The stock portion should be less than 25% of his portfolio. He should not add new money in the stock market at this point. I’ll check his accounts the next time I see him.

What is your strategy?

What about you? What’s your plan for the stock market? Are you adding new money, pulling money out, sticking to your plan, or something else? Please share your strategy and give us a little background so we can see where you are in life.

Track Your Passive Income

Lastly, here is a way to easily track your passive income – sign up for Personal Capital. Personal Capital is a great free site for investors. They have many tools that can help you keep track of your investments including the 401k Fee Analyzer and the Retirement Planner. I log on to Personal Capital almost every day and they have been extremely useful. (This is an affiliate link and we may receive a referral fee if you use this link to sign up with them.) Check them out!

The following two tabs change content below.
Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
Get update via email:
Sign up to receive new articles via email
We hate spam just as much as you
{ 87 comments… add one }
  • Kenny February 2, 2017, 12:49 am

    Guys, investing is a game of the long term. It is best to look for bargains from many measures and get into them. Sure the market is overvalued, but how much will it correct in the Trump term? 5%, 10%, 15%? How much will your stock correct? 20%?

    Compute these risks, and if you can bear it, then get into it with 25% of the position now, make the dividends while you wait, instead of staying in cash. I have been doing this for almost 3 years now, and it has been working out well. As the stocks come down, I get into it.

    For example, when the $41M got taken away by Congress for the ex-CEO of Wells Fargo, I got into WFC. As Qualcom got sued by Apple, I just jumped into it. Why? Where can it go? Another $5 or $10, but then I only bought 25% of my position, and getting ready to get into another 25% in about 3 months.

    So, get in SLOWLY and get out SLOWLY. It is NOT worth doing it ANY OTHER WAY, since you will NEVER know the perfect time, and if someone told you to buy in April of 2009, you would have been in Doom and Gloom land to buy and not have the guts to do it either. It turned out in Sep of 2009 that you just missed the best time, and now were waiting for a 2nd dip that NEVER came. There goes the perfect bottom of the valley to take that fresh drink of water from the best water-spring-fountain.

    So, my answer is ‘anytime’, but ‘take care, since the road is curvy ahead’. Remember those signs as you cross the Tennesse mountains. Just cause you see that sign, that does not mean you don’t go thru them, otherwise, you will never get to Disney World if you started your journey in Minnesota or Louiville or Indy!!!!!

    So, ask yourself, do you want to get to Disney World or return back home and get 1% at CapitalOne?????

    • retirebyforty February 2, 2017, 9:06 am

      It’s really hard to buy in when everything crashed. We kept buying because we had good income during the financial crisis. I think the next crash will be a pretty big one, 30-40%. In that case, the easiest way to buy is going into index fund. It’s nerve racking to buy an individual company when the market goes down like that.
      Get in slowly is a good idea.

  • Michael @ Financially Alert February 2, 2017, 12:57 am

    Joe, I’m a bit nervous about the market too. We’ve had a great run up the past several years and I can’t imagine it going much higher. With that said, I had the same thoughts last year and look where we are today!

    Since I’m an early retiree, I don’t really have the means to invest larger chunks of savings evenly over the entire year like before. It’s more of a maintenance mode for me at the moment and being efficient as possible and balancing my risk reward ratios. As I mentioned previously, I building cash and moving some of this to muni-bonds.

    As I quickly accelerate into my 40’s in a couple of months, I’m starting to appreciate not having TOO much excitement with my portfolio. 😉 I’m interested to hear what other readers are doing with their portfolios too.

    • retirebyforty February 2, 2017, 9:07 am

      I think we’ll keep going higher in 2017, but a big crash is imminent. I’m sure we’ll see it before the next presidential election. I could be wrong, though.
      Investing in municipal bonds is a good idea. I want to do that more too.

  • Roadrunner February 2, 2017, 1:56 am

    We’re in our early/mid 30s and do exactly what you also recommend for this age category: stick to the investment plan and keep on putting savings into investments (mainly to the stock market) and reinvest dividends. I also think a bigger correction might come within 1 or 2 years but I wouldn’t mind it personally. This is a part of the game and as long as you don’t need the money you invested, there’s nothing to worry about.

    • retirebyforty February 2, 2017, 9:08 am

      Exactly! You have plenty of time in the market. Keep investing as much as you can while you have good income. 🙂

  • Physician on FIRE February 2, 2017, 3:43 am

    “The best time to plant a tree is 20 years ago. The second best time is now.”

    P/E ratios have been high relative to history for some time now, but those that recognized it in 2011 and have been waiting for a return to “normal” have missed out on a great continued bull market.

    “Time in the market beats timing the market.”


    • retirebyforty February 2, 2017, 9:08 am

      The PE is approaching the .com bubble territory now, though. It’s getting higher and higher, pretty crazy.

      • Mr. Tako @ Mr. Tako Escapes February 2, 2017, 10:08 am

        The general market PE is high. But there are some companies with beaten down PE’s that might be good values right now. Of course, they will probably go lower when “the crash” actually comes.

      • Chadnudj February 3, 2017, 4:05 am

        I wouldn’t put TOO much faith in historical PE. I’m not saying dismiss it, but PE has been above long-time historical median levels pretty much every year from 1992-present (exception is the crash in 2008/2009, I think). And when you think about it, this makes sense, given the expansion of computers/reduced friction in the markets in terms of the costs/barriers of investing, international expansion of investing, the internet, etc.

        Of course, lots of people have lost money saying “this time is different.” Buyer beware….but there is a suggestion that the long term PE average should be adjusted somewhat upwards in the modern market to determine how/whether the market truly is overvalued.

      • Mr. All Things Money February 3, 2017, 2:00 pm

        Actually, we are no way near .com bubble P/E expansion. During the .com bubble, S&P 500 P/E peaked around 27 whereas we are still around a P/E of 19. So, relatively speaking, we are not at the same bubble level as back in 2000.

        Never the less, market is overvalued and in some sense it could be worse than previous bubbles due to uncertainty around what the new administration might do with the trade policies and border tax etc. Not to mention risk of conflict with another country could be higher than before.

  • The Green Swan February 2, 2017, 4:12 am

    I’m a long-term, buy and hold investor. That is my strategy and I will stick with it. If I start the “timing the market” game it will just lead to trouble for me. There’s a reason why studies have shown 20 year investors who pay no attention to the market outperforms those who check the market daily. I continue to invest including almost $25K already this year.

    • retirebyforty February 2, 2017, 9:09 am

      Wow, you have a great head start in 2017.
      Are you 100% stock at this point?

  • Rich @ pennyandrich.com February 2, 2017, 4:30 am

    Great post! I think this is important. I admit right up front that I don’t trust stocks as much as the average Joe (get it?). I’m planning a longer blog post myself on this soon, but here’s my basic argument.

    I can’t think of another investment where the overwhelming consensus is that price doesn’t matter. I’m not sure why this is, but I have some guesses. First, stocks have become the American national retirement account, first through the advent of the 401k, and now through the large scale adoption of indexing. We need stocks to work, because we all depend on the market. Quite a change, historically. A couple generations ago, investing in stocks was more like gambling. Today, every paycheck goes into the pile.

    These days we are told, with much confidence, to just keep putting large amounts of money in, and have faith that in the long, long run it’ll go up. (Oh yeah, past returns are not evidence of future performance but never mind that. It’s just legalese.) Have faith! Stocks are never down after a 10 year period. (Don’t look at charts from Japan or Europe — this is ‘Merica!) And whatever you do, don’t ever avoid stocks because you can’t time them. Just turn that critical thinking machine off, turn on Netflix, buy and hold.

    Well … I don’t blame anyone for sticking to this line. It works, for the most part. But I can’t buy at these prices. Look at long term charts of the markets. Something happened in the 90s, and prices went ballistic. We know that was the tech bubble. We laugh at people who couldn’t see it. So we cut rates like crazy and fueled the housing bubble. Ouch! So we did QE and now everything is back to normal, right? We couldn’t be in another speculative bubble …

    Possibly. But … I just can’t turn off my critical thinking machine and buy at these prices. I could be wrong and probably am, but I’m in my early 40s and I’ll be financially set if I don’t make any mistakes. Maybe I’ll miss out, but I can’t ignore prices. As prices go up, risk also goes up, and I think that’s what many people miss. Not educated readers of this blog, but many people.

    Thanks for writing! I’m prepared to get mocked in the comment feed 🙂 –R

    • retirebyforty February 2, 2017, 9:44 am

      Thank you for your comment. I agree with you for the most part. I hope we don’t have a prolong downturn like Japan. It’d be much better to just have a huge crash and recover like we previously seen.
      What do you do with your money currently? Gold bullion? 🙂 Actually, I’d like to pick a few coins up just for emergency.

      • Rich @ pennyandrich.com February 2, 2017, 12:12 pm

        True, Japan is a cautionary tale. But don’t worry, I’m not in a bunker with stacks of gold bars! Ha. Good question because if you don’t invest heavily in stocks, what do you do? Currently, most of my 401k money is in very conservative treasuries paying 2.3%. I’m waiting for cheaper prices to move that money into stocks, and I’m ok with waiting or missing out. My IRAs are invested in Prosper.com P2P lending notes. I’ve been very happy with that vehicle for tax free growth around 8-10% annually. (I should write about my Prosper experience sometime, it’s been excellent.) I also have some alternative investments in farm land and commercial real estate, which I realize is not easily accessible for most people. My overall point, however, would be that there are options out there to diversify, perhaps to complement a stock portfolio at the very least. It takes some research, but stocks should be researched too rather than accepted at face value, right? Just my opinion and my own risk tolerance. I’d like to get better at dividend investing, so I read your recent post on that topic with great interest! Thanks again –R

        • retirebyforty February 2, 2017, 10:52 pm

          I’d be cautious with P2P. I think it’s fine for a very small percentage of your net worth, maybe just 1-2%. The default rate will shoot way up when we have a recession. Did you go through the last recession with P2P lending?
          Real estate is a lot more solid.

          • Rich @ pennyandrich.com February 3, 2017, 10:11 am

            I started investing in P2P in early 2011 — that industry has evolved a lot since the last recession. I’m not a huge risk taker, but I like finding ways to diversify and P2P provides that. Done correctly, it can be a nice income generator similar to dividend stocks, albeit taxed differently. Anyway, it’s a small investment compared to my other holdings. I come from a farming area, and I agree that real estate and land are solid resources. As my dad always says, “they ain’t making any more farm land!” I think with any investment, position size should be commensurate with risk. I’d venture to say that many people have a large portion of net worth in stocks + houses. I need to go back and read your rental property post more closely — it’s something I’ve considered but haven’t seriously prepared for. Thanks for the discussion!

    • ThinkingAhead February 2, 2017, 11:45 am

      There’s a book called Stocks for the Long Run which is pretty interesting. It looks at historical data and comments on different time periods, their returns and reasoning as to why. It’s a dry read, unfortunately, but does have a lot of information.

  • Matt @ Optimize Your Life February 2, 2017, 4:39 am

    I have been making predictions and guessing what will happen with the stock market (and the value of the dollar in the event Trump follows through on his trade war threats), but I haven’t changed my actions at all. I am keeping the same amount in cash. I am investing the same amount from each paycheck. I am just plowing ahead with my current plan. I figure times like these are why I figured out my risk tolerance ahead of time and planned a strategy around that.

    • retirebyforty February 2, 2017, 9:48 am

      Sticking with the plan. Good job! Last year, I slowed down the pace of investing a bit and I didn’t like it. I’d rather be invested even if there are risk.

  • Freedom 40 Plan February 2, 2017, 4:43 am

    Like you, my bond allocation is pretty low right now – mostly due to strong stock performance and also a lack of me funding those positions well over the last couple years. So, with stock values high, and bonds lower – I’m putting a lot more in this category for the first part of the year. After that, I’ll slowly invest in regular monthly increments, but I’m also hoarding some cash to take advantage of a possible downturn or other opportunities.

  • Go Finance Yourself! February 2, 2017, 4:57 am

    People have been saying the market was due for a correction since back in 2011, as you mentioned in your first paragraph. I think about all the gains I would have missed out on had I listened to them. I know plenty of people who did and foolishly pulled their money out of stocks. It’s like in baseball where they say a guy who is 0 for 15 is due for a hit. If he’s a good hitter, then yes, he’s going to break out of the slump and likely go on a tear to bring his average up. But when will that happen? Will he get to 0 for 20, or 25 first? I just don’t believe in making specific bets on the market in the short-term. I can see the market is overvalued, but it has been for some time. All I know is the market will go up over the long-term.

    Since I have a longer time frame left until I will need to cash in my investments, I feel comfortable sticking the majority of it in stocks. If I were closer to needing the money, I would shift to safer assets regardless of what the market was doing or expected to do. Time and time again we see the market prognosticators end up wrong. I’ll just keep dollar cost averaging into the market. Some years will be bad, as was 2008, but there will be many more good years than bad years. That’s for sure.

    • retirebyforty February 2, 2017, 10:33 pm

      The time frame really is the key here. Investors need to stay invested over the long haul. If you have 10+ years, then the stock market is a very good bet.

  • Nicoleandmaggie February 2, 2017, 5:10 am

    It’s going to crash and crash hard. Companies hate uncertainty and protectionism. Workers too will be less productive. The question is just when is the current bubble going to pop.

    Most economists knew the housing bubble was going to crash the markets (though everyone was surprised how deep the damage was), but timing that was unpredictable.

    Prior to the election I had been planning on putting our excess money in the taxable markets in lumps of 10k. Now I’m letting it accumulate in savings in case we need to move quickly. If we get enough or it looks like they will start coming after dissidents I will probably put some into overseas currency markets.

    I am treating our retirement and 529 savings as if the world were normal and we weren’t on a fast train towards totalitarianism. Because there is that chance that we won’t drive off the cliff.

    • retirebyforty February 2, 2017, 10:36 pm

      Thank you for your input. I’m nervous about a big crash too. It’s just a matter of time.
      Putting money overseas sound complicated. How do you know which currency will do well against the US? Any tips? 🙂

      • Nicoleandmaggie February 3, 2017, 4:45 pm

        You don’t necessarily pick against US, but try for a few stable currencies in stable countries, realizing that if the world is going crazy, no single currency will be a safe haven. That said, forbes has some interesting articles on safe haven currencies (Swiss frank, yen, etc. none individually is perfect though). The idea is safety, not growth. You know, in case the US decides to intern or jail specific groups and seize their assets. Which should be a ridiculous idea, but…

        In other news, my colleagues today mentioned that a lot of trumps proposed plans are inflationary so the fed will raise interest rates. I imagine that’ll be down the line a bit though.

        • retirebyforty February 4, 2017, 8:15 am

          Great advice. Thank you!
          It’s a crazy time here in the US.

  • Lazy Man and Money February 2, 2017, 5:16 am

    There are some international markets that aren’t as high as the United States’. For example, VTI (Vanguard’s Total Index) is up 73% over the last 5 years. VWO (Vanguard’s Emerging Market Index) is down 11%. VEU (Vanguard Ex-US) is up only 8%.

    If you are nervous about investing in the United States, you can tilt the balance towards other places that haven’t seen the run-ups that make them look expensive.

    • adumbby February 2, 2017, 6:31 am

      VWO is up slightly over 12% 1 year. Up %1.5 for 5 years. It’s not down 11%

  • FI Fighter February 2, 2017, 5:27 am

    I got out of general equities in summer of 2015 and have zero regrets… Nope, nobody can perfectly time markets, but using historical valuations should give us a rough idea of where we are at…

    Is this current market cheap? Not by a long shot… I think that much is clear. Same with Class A/tier 1 real estate. Where do we go from here? I have not a clue, but I sleep very well at night knowing I have zero general equities in the game (but I am fully invested in junior miners which were absolutely annihilated from 2011-2015).

    So, I guess that’s what it comes down to for each investor… Your sleep quality will determine your risk appetite .

    Happy Hunting!

    • adumbby February 2, 2017, 6:34 am

      I ended up betting it all on black and haven’t looked back.

  • Mrs. Picky Pincher February 2, 2017, 6:30 am

    It’s so tough to know when the “right time” is to invest. For us, we’ve decided to invest solely in IRAs and 401ks while we’re getting out of debt for the next two years.

    After that point, we’ll sink cash mostly into index funds and then maybe 10% – 20% stocks. Since our debts have an interest rate of over 6%, it gives us a better return to pay off the debt than to invest and reap dividends.

    • retirebyforty February 2, 2017, 10:37 pm

      That’s a good way to do it. Your retirement funds should be fine because you have so much time left. Paying off debt is really good too. It’s a sure thing.

  • Dividend Growth Investor February 2, 2017, 6:42 am

    I focus my attention on dividend growth stocks, and I do not focus on “the stock market”. Dividends are more stable than capital gains, and therefore a reliable source of income in retirement. I ignore stock price fluctuations, except for to find a bargain for my portfolio. Stock price fluctuations are meaningless and only scare those who lack patience, who lack discipline, and those who view stocks from the perspective of a gambler. I view investing from the perspective of a partial owner of a business. If the business earns more money, and shares more money with me, I am a happy camper. If I can buy it at a reasonable valuation, I am even happier.

    For example, I am pretty sure that Johnson & Johnson will pay at least $3.20/share in dividends over the next year. However, I haven’t got a clue if the stock price will be above $125 or below $75/share.

    • retirebyforty February 2, 2017, 10:39 pm

      I haven’t gone through a big crash with our dividend portfolio yet. It will be tough when some companies cut dividend. We’ll have to figure out if we want to sell or keep them.

      • Dividend Growth Investor February 4, 2017, 12:01 pm

        Usually, dividend cuts are concentrated in a sector or two. This is where diversification helps. It also helps to avoid high payout ratios – anything more than 60% is a red flag

  • Mr. Saturday @ Seeking Saturdays February 2, 2017, 7:58 am

    The stock market does seem overvalued at the moment, but I could’ve said the same a few years ago and would have been completely wrong. Being that we’re in our 30’s and have made our minds to invest for the long term, we’re putting our money in the stock market. The tax savings up front from our 401ks & IRAs has been a no-brainer. We could keep that mostly in bonds, but it’s also nice to keep getting dividends.

    At the same time we’re investing, we also have a large chunk of cash that if a major correction happens, we could buy stocks on sale. After years of guessing what the market might do and being wrong, having a solid plan of action helps us to not freak out and buy high / sell low. If we were much older or closer to our FIRE date then we’d have to be more cautious, but being young we still have time on our side. Great thoughts though!

  • Fiscally Free February 2, 2017, 8:17 am

    We are about to sell our home which will result in a large lump sum, and I am very nervous about dumping it all in the stock market. I’ve been exploring other options, but I’m still very unsure about what to do.

    • retirebyforty February 2, 2017, 10:40 pm

      You could DCA in a bit at a time. That’s a tough decision. I’d agonize over it too. 🙂

  • Ty February 2, 2017, 9:14 am

    I’m about to get a relatively large cash bonus at work and am struggling with how to best put that money to work. I’m leaning towards putting half of the bonus towards debt, putting 1/4 of it in my IRA, and using the remaining 1/4 to play with.

    By they way, I’m not a fan of people sitting out just because the stock market is at or near an “all time high.” The way the market climbs up, up, up over time, we’re very often at an “all time high” so that’s not a good reason to sit on the sidelines.

  • Royal Blue February 2, 2017, 9:37 am

    We just recently retired in our early 50s. I’m generally on board with the arguments against market timing, but I’m still cautious about putting new cash to work right now. We’re sitting at about 55% stocks, with the rest split between bonds and cash (mainly stable value fund, which at least makes a couple % return). I’d like to be about 55-65% in stocks, so we’re on the low end of our target asset allocation. The market feels expensive and it’s had a long run, so I’m keeping some powder dry and looking for opportunities. I’m not pulling anything out of stocks, but to put in additional money I need to see better value than what’s out there right now.

    • retirebyforty February 2, 2017, 10:42 pm

      Thanks for sharing your strategy. I’d be a lot more conservative when we both fully retire as well. It’s harder when you don’t have new money to invest when the market is down.

  • David Michael February 2, 2017, 9:42 am

    At age 80, the one thing I learned about investing is not to time the market. That’s why I really like investing in high yield dividend paying stocks like REITs, DBCs, and Utilities (about 10% yield on average). I would invest in industrials, but running out of time and need the high yields. And…I do caution anyone, yes…I expect a severe downturn during the next four years under Trump. Fortunately, we have rock solid I Bonds that are paying 5.37% interest this month, which is pretty amazing, having bought them in 2001.

    We are now converting our P2P funds (Prosper) to cash over the next three years which are currently paying 10.65%. We are slowly transferring this monthly cash to Dividend Paying Stocks as I recently retired again this month for the umpteenth time. I must say that the folks over at Prosper have been great. It is so easy to transfer cash from the P2P funds into the bank, something that worried me in the beginning. I think P2P investing makes for good diversification.

    Finally…regardless of age, one can go back to work for short periods of time. It ain’t over until it’s over. I’ve had some great seasonal jobs for the past 20 years in different parts of the
    world. And…given the nature of our present administration, I am completing a cargo van conversion to a small camper should Civil War, Revolution, or a downright Crash take place.
    In the meantime, I’ll enjoy the National Parks and National Forests while we still have them.

    • retirebyforty February 2, 2017, 10:44 pm

      So you’re getting out of P2P? We are too. The default rate will shoot way up when the economy stumbles.
      Good idea about the cargo van conversion. 🙂

  • Max Your Freedom February 2, 2017, 9:59 am

    Rule #1 is something to I need to remind myself constantly. What I struggle with is the frugal side of me overcoming what by all appearances is an overvalued market. I understand the whole issue around market timing. But if you’re sitting on a pile of cash (like I am), putting it to work as new highs keep being made is difficult. I’ve decided to inject my cash into index funds over a 2 year spread, while keeping a fair amount in reserve in case of a big drop, at which point I’ll hold my nose and jump in more aggressively.

    • retirebyforty February 2, 2017, 10:45 pm

      I like your 2 year spread strategy. I only wish we have a pile of cash as well. 🙂 Good luck!

  • Smart Provisions February 2, 2017, 10:11 am

    When I invest, I try to invest long term and not worry about how the market fluctuates in between. That’s why there’s dollar-cost averaging, to help adjust and reduce the impact of the stock market’s volatility.

    “The best time to plant a tree was 20 years ago. The second best time is now.” – Chinese Proverb

  • Mr. Tako @ Mr. Tako Escapes February 2, 2017, 10:13 am

    Lots of solid advice in this post Joe!

    I don’t know if “the crash” is going to happen this year or 3 years from now. But I do know this — at today’s prices business returns are minimal ~ 4%.

    Anyone who invests dollars *today* at those rates and expects to withdraw 4%, is in for a world of hurt…especially with 2-3% inflation.

    • retirebyforty February 2, 2017, 10:47 pm

      It’s tough to retire right now. There are so many uncertainties. Early retirees should plan on withdrawing quite a bit less than 4% or plan to be flexible.

  • David Michael February 2, 2017, 10:16 am

    Regarding the gentleman who recently retired (60 year old high school teacher), I never would have pulled out the money from my retirement fund to self invest (in hindsight), which is a huge responsibility. Most people are not trained to do this adequately as I personally found out over the past 40 years. So…if I did have a large fund of money now, I would slowly, very slowly, put the money into Target Investment Funds, such as 2025 (13 years away). Investing seems easy…but I have personally experienced a crash of our funds several times and people react sometimes against their own best interests. I remember once when I just purchased solid mutual funds in Vanguard. Within a year (2008-2009), the market tanked and I couldn’t stand it. I just pulled everything out …due to the fact I was already retired. I hated to see that money disappear that took a lifetime to earn. That’s why today I personally love Dividend Paying Stocks…I am always waiting for a downturn so I can buy more with the monthly dividends that keep piling up. But in the end…one of the benefits of working for the government (teaching, whatever) and having a Defined Benefit Pension, is that they do all the work. It’s rare that anyone can beat the returns of a government pension. (I lost my teaching pension due to a difficult divorce.)

    One other way to make a large investment of funds is to buy an annuity. Not!!!!! My wife lost her annuity at age 60 because the company went bankrupt. Indeed, the largest insurance company in California. Yes! These things do happen to ordinary people. Yeah I know…the state is supposed to protect us from such things happening, blah, blah, blah. An annuity is only as good as the company that sells it. That’s why I say…keep your government pensions. Let them handle the headaches of a secure retirement and you just collect the check every month. Yet…no matter what, life continues, and “it ain’t over until the fat lady sings”. After all, we live in the land of the free…don’t we?

    • David Michael February 2, 2017, 10:20 am

      Whoops…made a math mistake on the Target Funds (2025)…only eight years away. Wow How time has passed! Come to think of it, maybe it would be better to distribute the funds over several Fund dates such as 2025, 2030, and 2035.

    • retirebyforty February 2, 2017, 10:48 am

      Thank you for your advice.
      From what I understand, she took out a part of money. She still get pension, but at a lower rate.
      I can imagine how difficult it must be for retirees to watch the stock market crash. At that point, you don’t have the income to buy more. We’ll cut way back on stocks once we both retire full time.

      • ThinkingAhead February 2, 2017, 2:49 pm

        Just read an article today about a pension plan that is cutting benefits to retirees. Some of the cuts were up to 605 of the benefit. Still think pension plans are safe?

  • Tim February 2, 2017, 10:20 am

    Good post Joe.

    I am also worried about the market at the moment and my portfolio is about 60% cash.

    I am not even finding cheap companies in Europe any more, only Japan where there are some REALLY undervalued small companies.

    I found this post (no affiliation) which changed my mind on investing at the moment. It shows what happened the following year when the stock market started with a P/E ratio of over 20x and it does not look too bad at all.

    Here is the post: http://brooklyninvestor.blogspot.de/2017/02/bogle-book-indexing-etc.html

    It changed my mind and I am going to increase my investments somewhat. Not go mad but if I find something worthwhile I am going to buy it.

    I hope it helps.

    Keep up the good writing.

  • Mr Crazy Kicks February 2, 2017, 10:38 am

    Wise advice, Joe. I remember people talking about the market being high years ago, and my gut reaction is to believe them. Luckily I don’t invest based on my gut reaction anymore and have been enjoying this bull market. If you invest now, there is a possibility of some pain, but a decade or two down the line you’ll be happy you did 🙂

    • retirebyforty February 2, 2017, 10:48 pm

      You really can’t trust your gut. What does it know about investing? 🙂

  • The Grounded Engineer February 2, 2017, 12:55 pm

    My plan, as a 29 year-old, is to continue my strategy of investing in low-cost index funds with Vanguard. Currently, I have 95% of my investments in stocks and 5% in Vanguard’s total bond market index fund.

    I have quite a few years before retirement; even with a stretch goal to retire by 40 🙂

    • retirebyforty February 2, 2017, 10:53 pm

      Great plan! Your asset allocation sounds just about right for your age. Good luck!

  • Shels February 2, 2017, 1:02 pm

    I am 42 and still working full-time. I will have a pension that I can start drawing at age 50 and will give me 2% of the average of my three highest income years for every year that I worked. Since I will be with my company for 25 years when I reach 50, I will be able to receive 50% of my income (about $50,000 a year) for the rest of my life. I also will receive a COLA every year in retirement. I am relying on my pension for my future retirement.

    I also contribute to a 457 plan every pay period and I plan to continue to do that. I am not sure I will be able to hit the $18,000 contribution limit set for the year by the IRS, but I am working toward it. Regardless of what the market does, I plan to continue to do this.

    I am expecting a big downward turn in the market soon and what that means for me is that everything is ON SALE!!! I also have a taxable investment account and when everything goes on sale and the market takes a turn, I plan to go on a shopping spree!!!!! I am holding onto cash until the market takes a dive and plan to shop shop shop!!!

    Thank you for your post, always enjoy what you write.

    • retirebyforty February 2, 2017, 10:54 pm

      Wow, that’s a very nice pension. You’ll be in a great position to retire very soon. Good luck!

  • Penny Pincher Paulson February 2, 2017, 1:13 pm

    Thanks for all the great info Joe! My wife and I are both 28. I’m just starting to learn about markets. We are investing in our 401k’s up to the company’s match. Mine is 4? dollar for dollar match, my wife’s contribution is 5? for a 4? match. All other extra money from our balanced budget goes towards our pesky student loans! We plan to use this system untill we are debt free. If the stock market bubble does pop, I’m pondering transfering my money from mutual funds to the less expensive index funds. My thinking is that my mutual funds will not drop near as far as the market so I can gain there, move to less fees, and with time on my side I’m comfortable in a index fund with perhaps more volitity.

    • retirebyforty February 2, 2017, 10:56 pm

      That’s an interesting strategy. I know the index funds have done really well over the last few years and beat the active funds. I’m not sure how they compare in a bear market. Have you checked out how your funds did in the last recession compare to the index?

      • Paulson February 4, 2017, 11:58 am

        I have not looked at that Joe, but that is definitely my next step. Thanks again!

  • Al February 2, 2017, 1:27 pm

    Hi Joe,

    We use Ray Lucia’s strategy, Buckets of Money. so we have buckets allocated for Emergency Fund, Income, Safety, and Growth. We added another one for Legacy.

    Based on our age, needs, and strategy we have allocated monies in different investment instruments to each bucket.

    Our target allocation is not only based on risk but in purpose of the bucket. For example, our real holdings are in Bucket 3 for growth. We have a portion of one of our 401K in a stable fund to Bucket 1.

    We also have a plan we called Spending Plan. It is a spreadsheet with several tabs. The Spending Plan tab has an income and expenditure rows with columns for the years working, semi-working, retired, and dead. This works like a balance sheet and can be compared to actuals. Other tabs include monthly and yearly budgets, BucketsInvestments, rental budget, profit and loss statement, and yealy cash flow by months.

    We use MoneyGuide Pro for the aggregate tool. Similar to Personal Capital. Also Mint for budgets.

    At 60, we should be in a 60/40 portfolio.like but we are in a balance 50/50 because we have pension income and a dividend portfolio.

    We have simplify our investment strategy with the proper horizons. Most of them are 5 to 10 years. Right now I set up my dividends investments to cash instead of reinvestment with purpose of buying in a sizable pull back or sale.

    We looked at earnings and revenues reported. They are a good indication of the market valuation. Volumes or where hedge funds put their monies also have an impact.

    We do not try to time the market. We work with predictable things such as buy offs and sell offs. They happen and can be historically seen. Market is going to go up and market is going to go down. This is consistent with Charles Ellis book, Winning the losing game for indexing.

    That is it! Hope this sharing helps someone.

  • CoupleofCents February 2, 2017, 1:47 pm

    I do expect the stock market to crash at some point. Here’s what I did with $12,000 so far. $5,500 Vanguard 2050 Target Fund for my wife’s IRA. $5,500 Lending Club for my IRA. $500 GroundFloor crowdsource real estate flips. I’m 31 so I still have time so I will continue to invest. The rest of the year will go to VTSAX, VTIAX. Just keep plugging way.

    Essentially because the market is so high I shore up my Alternatives from 8% to 11% to bring it in line with my target allocation on Personal Capital. Here’s where we are at:

    U.S. Stocks in VTSAX – 50%
    Int’l Stocks in VTIAX – 22%
    Bonds – 15% we use VBMSX and VTIBX
    Alternatives – 11% Vanguard REIT, Lending Club
    Cash – 2% in Ally Online Savings Bank

  • Full Time Finance February 2, 2017, 5:24 pm

    We’re still adding via our automated 401k amounts at 100 percent stocks. Our safe allocation is slightly overweight due to recent mortgage contributions. We had a small amount to dump into our Roth starting Jan 1. I didn’t get on putting it in yet. Im Sorry I didn’t make it before the recent run up. It’ll likely go in on the next partially down day. It’s small enough compared to our overall portfolio the short term psychological aspects of buy on a dip outweigh returns. Sometimes psychology trumps numbers.

  • Andreas February 3, 2017, 2:32 am

    If we want more money, the easy way is it another way?

    By just keep investing there is a chance for a lot of money in the end, and freedom!
    For those who just keep on pushing money in to a standard bank account that money will do no good. At least that is for me.

    Sure save $1000 dollars, and in ten years you have $1010 dollars. Whatcha gonna do?
    Or invest in dividend stocks and big companies, or indexfunds an have $20000 (I am making up the numbers) or your $1000 dollars might be worth $800.

    That is how I think, investing in the stock market, at least when you go for the big companies seems like a non-effort way to get the big bucks.

    That or work your ass off and hope for success or be good at daytrading/swinging or maybe be a real good with residental properties.

    I also think “what else am I going to do with the money I save?” There is a mindset here, those $500 extra you save every month, would those be used to something good if not saved? Or just wasted on gasoline etc? Then maybe the risk is actually a lot lower than you think.

    Save money you can live without!

  • Mr. Enchumbao February 3, 2017, 4:53 am

    Great tips! It can be a scary market and that’s why it’s even more important to have a proper asset allocation.
    Whenever we have new money to invest, we take a look at our portfolio allocation and also our net worth allocation to see where we need to invest the money. As of now, we want our portfolio allocation to be 10% REITs so we’re buying REITs until we get it up to that percentage. Our stocks and bonds are where they need to be. We’re also saving lots of cash because we’re going to build/buy a house over the next 3 years.

  • Dividends 4 Future February 3, 2017, 5:54 am

    I have never stopped buying, there is always a blue chip on a bargain because of asset movement or the latest noise that the “retail sector” is being killed etc. I take most of these reports with a grain of salt. Its been proven again and again that investing is a long term, boring game. Time in the market has been proven to be more lucrative than timing the market over the long run. I’ll be a buyer in any market. Hopefully there is a correction soon but I’m not holding on to cash waiting for it. We can all wish for the best and good investing luck in 2017 🙂

  • Smart Money MD February 3, 2017, 6:50 am

    I’m still in the accumulating phase of my investments, so I’m sticking to equities. As other commenters have alluded, I hope that the U.S. doesn’t replicate what has happened to the Japanese markets, but that is a risk that I am willing to take.

    Perhaps if any stable fixed asset growth opportunities come up over the next year, I’ll contribute to those to temper any activity in the market.

  • Mike H. February 3, 2017, 10:30 am

    A bit late to the game here.

    Personally, I’m building up a cash position using the funds I would normally put into dividend stocks; any short term future buys will be for cost-averaging down. But I continue to dollar cost average into index funds; this represents most of the money I invest. Just ride the wave of the market.

    I’m concerned about your 60 year old reader. Obviously, I don’t know the specific system she’s in or her specific situation, but I have spent years in the retirement industry (focusing specifically on public plans, and mostly public teacher plans – so I know what I’m talking about), and I’m worried that she just compromised her financial future. Withdrawing member contributions from a teacher plan usually comes with consequences. Yes, you get a lump sum, but you could be losing anything from survivor benefits to an additional annuity which was meant to be funded by those contributions, or in some cases the entire pension.

    I hope she consulted with her husband and a financial planner here – there’s a lot of predatory marketing that goes on in this arena. Joe, I’m willing to do some research on her behalf – and all of ours, really – because this is an interesting and worrisome situation. Feel free to email me with more details and we can discuss.

  • Felipe February 3, 2017, 12:07 pm

    When I do retire at age 53 (I’m 52 now) and this large sum moves from employer’s 401K to my individual manager guy at Merrill, I cringe at the fee he’ll be getting. I know he adds value and knowledge, but it just seems like a lot of money. For now, I am putting money in the market of about #25,000/year. After retiring I won’t be adding as much. Like most here, I do fear it’s a bubble about to burst. The market doesn’t seem logical, only looking at very short term earnings potential. I concur on the protectionism comments. Just seems like a bad road to go down long term, and I expect international investors to start pulling out of our market.

  • Make it Hail! February 3, 2017, 12:52 pm

    I think this year is going to definitely be interesting, it either the slow melt up or we’re going to have a genuine shock to the system. What’s truly interesting is that two term presidencies typically result in market crashes for the incoming president and it will be interesting to see if this one is different.


  • Mr. All Things Money February 3, 2017, 1:44 pm

    If you look at the S&P 500 P/E ratio over the last 2-3 years, you will see that all the gains in S&P 500 over these last three years have been due to P/E expansion and not earnings growth. The cumulative earnings (EPS) of S&P 500 companies only grew about 2% in this period.

    Therefore, yes the market is way ahead of its underlying earnings (trading around P/E of 19) and it can’t go on like this unless earnings catch-up. There are also additional risks due to new policies and potential trade wars that may impact profits of mid-to-mega cap companies that do business globally.

    On the other hand, there are also potential positives such as lowering of regulations, lowering of corporate tax rates, and one time repatriation of corporate cash held outside the country. These upsides could prove to be a shot in the arm for the market and make it go further higher.

    My position as always has been to keep enough cash to take advantage of any corrections while continue to invest in under valued companies. Regardless of what the broader market does, there are always opportunities to grab, especially if you are a long-term investor.

  • FIREin' London February 4, 2017, 2:26 am

    Hi RB40,

    It is an interesting one right now – the stock market seems high and so I am reluctant, however who knows what the future holds!

    The bulk of my investment is on auto pilot – it plugs into the market every month, regardless of what the circumstances are so I don’t worry. The stuff I do myself, I actually cashed out a bit in January, some of the money is sitting on the sidelines (earning nothing!) waiting for the right opportunity, and some I found a suitable home for, but it is not in an index tracker! If I were pure index tracker, right now I would just keep slugging it in there to work for me!

  • Jay @ ITF February 4, 2017, 8:10 am

    Thank you for the great post on stock market investing. I think you did a good job highlighting the pros and cons, particularly as it relates to different life stages and scenarios.

    The other thing that stood out was having a systematic, process-based approach to saving, investing and asset allocation makes a big difference over time. For me this has helped me stop worrying so much about drawdowns and losses in the market during periods of volatility or high valuation. Cheers!

  • Conrad February 5, 2017, 9:37 am

    I have a much less pessimistic view of the future of stocks. The stock market is at or near all time highs most of the time, that’s the nature of economic growth and inflation. I don’t think that’s a good indicator to predict future returns.

    The major indices exhibit elevated trailing PE ratios, primarily because of the optimistic view of future returns. In fact, PE ratios using analysts future expectations are lower this year than last, indicating more value in the market than the same time last year.

    I also don’t believe a major “crash” is a certainty or representative of the market’s history. We had a 14-15% drop in the major indices just last year. Had the market fell another 5-6% and stayed in that range for a couple of months, it would have qualified as our definition of a “bear market.” Had that happened, we could easily be sitting here today at the same market highs, saying that we are at the early stages of another bull market after the bear market we had last year.

    We may never have another 30-40% crash in our lifetimes. Keep the long term in mind, don’t dwell on the fact that the value of the indices are what you believe to be high or the fact that the indices haven’t dropped recently as much as you believe that it should/could. None of that emotion should be taken into account when investing.

  • Dividend Diplomats February 5, 2017, 10:11 am

    RB40 –

    Great article, of course, given the highs the market is at. I am similar in a few areas to you – I let my HSA and 401k invest automatically on a consistent basis that’s never altered; proportionate throughout the year to max those out. I then, however, run our stock screener to see what fits into the metrics I stick to, based on P/E, payout ratio, yield, and Dividend growth rate. If it fits in the screener and they are fundamentally sound, then I buy it – however, this year I am not buying in “mounds”; but buying in smaller purchases; to not over do it. I want to stay consistent and increase that dividend income, but doing it in a smart, “concluding” fashion. Thoughts?


  • Fred February 5, 2017, 11:23 am

    At 65, retiring in a couple of months, and Trump tweeting trade wars, I’m running scared. With everything going on right now I don’t want to worry about the stock market. So I’m really conservative now with a lot of cash. I know I could miss out on some paper gains, but peace of mind is more important right now.

    • retirebyforty February 6, 2017, 9:01 am

      Cash is king in uncertain times. I would do the same if I’m 65. Good luck!

  • Jason February 6, 2017, 9:15 pm

    Lesson #1: Be careful of the “stock tips” your friends tell you about.
    Lesson#2: Read and watch youtube videos from the stars of investing…Warren Buffett, Peter Lynch, Howard Marks. They do a really good job instilling a rational mindset towards investing.

    I haven’t been following Lesson#2 lately but it’s been paying off. In 2016, Canadian marijuana stocks were where it was at. I’ve sold some shares to secure my principal because it’s a risky industry and the volatility can be too much for me at times. There’s a lot of hope though in this sector.

  • Your First Million February 7, 2017, 12:40 pm

    The most common wisdom in investing is “buy low, sell high.” I have found that for the majority of people, this is much easier said than done… and although everyone knows this simple advice, very few actually practice it.

    I have a funny story on this. During Christmas in 2009, I was talking with some of my relatives about buying some investment properties. My grandmother (83 years old) said this to me:

    “why would you ever do such a foolish thing? Real estate is probably the worst possible investment you could make right now! We just had the biggest crash in home values that I think I have ever seen in my lifetime. You couldn’t do anything worse with your money right now.”

    Well I am so glad I didn’t listen to her! I have made several hundreds of thousands of dollars since then from my real estate investments. We were at the BOTTOM of the market, and many properties were very UNDERVALUED! It was literally a fire sale on real estate. I wonder what my Grandmother thinks of my investment strategy now…. lol.

    When the stock market is hitting “all time highs” every other week, maybe it’s time to sell… as hard as that may be for some people. Certainly it is not the time to enter the market. I am sure my Grandmother would be saying to me “now is a great time to buy stocks! they just keep going up and up! You would be an idiot not to be in the stock market right now!”

  • Andrew February 8, 2017, 10:42 pm

    Great topic and it’s still a timeless debate. Personally, I am weary of the market right now. I haven’t been investing as much especially after the post election Trump surge. I have a few overall concerns with the economy, but who knows, the market can go on for another two or three years or even more. In these times, I try to allocate my investments into alternatives assets, specific sectors that may be undervalued (like oil/gas), or the select few individual companies.

  • DivGuy February 9, 2017, 6:20 am

    I don’t like listening to correction or market crash rumors. I’ve set my strategy in order to be confident for the next 20-40 years! I don’t care about a loss period of 5 years. I know the market will make out for it like it did before. Sure if you want to retire in a few years AND will be using that money you should consider safer investments. Still, the right time to invest to me is always NOW! There are always stocks with good valuation.

    It’s also the reason why I like dividends so much. Even during a crisis, most companies keep the dividend payout. The risk is much lower that way.

    I’m done with being nervous. It’s a waste of time and energy!



  • Karissa February 22, 2017, 11:02 am

    I know as a younger person, you and most people say I should just go ahead and invest after I have my emergency fund set aside which I do. But I was wondering what people’s thoughts were on buying into the current market when you might want to pull some money out in a few years for a downpayment on a primary residence? This would be referring to my after tax investment portfolio, not my retirement fund. I currently own a townhouse but would like to get into a single family house and rent out my townhouse.

  • No Sun Beach April 23, 2017, 4:49 am

    The US Markets and US economy is going to have to rethink the way it values itself. We may be overpriced, but we are about to witness is unlike anything we have ever seen before. IMO, bigger than electricity and the internet combined. AI and Deep Machine Learning are to change everything, everywhere and those big players that have returned 1000% in years prior (like Google, Amazon and MSFT ) are going to cut through all sorts of industries like butter. The goal is masked behind progress… cure cancer, cure aids, find the next inhabitable earth like planet, but behind it is something less obvious like replace taxi drivers, security guards and cashiers with software and cameras. This is not science fiction and once the learning algorithms are improved to the level where machines are in a continuous improvement process on their own automated and self service models be showing up everywhere and at alarming speeds. Possibly good for winners, but how does our economy and markets work in a world where we need less and less human resources and companies?

    Read what Mark Cuban has been saying on these topics .. it’s fascinating.

Leave a Comment