Asset allocation in a US stock market bubble

His follow on article about how it will burst, is also interesting https://www.ft.com/content/9a0da0d6-92b4-4034-ac25-7b4abcbb0bbe

This was an intersting quote from it:

"But, mesmerised by “American exceptionalism”, analysts can talk only of how the US has been the world’s premier market for a century. They forget that in six of the last 11 decades, the country’s stock market lagged behind the rest of the world, most recently in the 2000s when it delivered zero returns and emerging markets tripled in value"


edit: I hope it's ok to put that short quote from that article here, given we are referencing the FT article, and the original FT article.
 
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Guessing might work a few times but then your next guess will throw you back to a place where you were better just left things as they were

Maybe perhaps keep an extra amount of cash as an ongoing policy so you feel less exposed during inevitable corrections,added bonus of being able to buy some on sale
 
Its not about staying out of the market but specifically the exposure to the US market and especially the US tech sector. Of course if that sells off everything will go down initially but in 2001 it was everything that wasn't US tech that recovered quickly. The index funds are also an issue due to the proportion of global indices being made up of US tech. Yes there has been warnings about the valuations of US tech for years now even before covid. I think that like 2001 the impact of technology and AI etc is way over stated, its mostly in media and communications where AI will impact but its hardly going to affect industrials ,energy or construction. I doubt AI will affect the reconstruction of LA hills, Ukraine or Gaza , that will still take huge amounts of labour, materials and money, all old school stuff
 
I see a big tech sell off in US with big Nvidia share fall following new Chinese AI app that doesn't appear to need high power expensive chips. The S&P 500 was down 1.5% yesterday but the European and UK markets unaffected and actually up slightly.So it looks like that if there is a big tech sell off the European markets could become a safe port in a storm like what happened in 2001 when everyone ran away from anything tech related
 
Good lesson in the unintended consequences of protectionism.

US introduces measures to limit the supply of chips to China, to curtail it's ability to complete.

Chinese companies respond to the scarcity achieving the same output, with less input, making themselves more competitive in the process!
 
joe sod said:
I see a big tech sell off in US with big Nvidia share fall following new Chinese AI app that doesn't appear to need high power expensive chips.
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The chips are very much still needed; it's people using the chips inefficiently who should be worried. I don't want to veer into discussing individual stocks, but Jevons paradox would suggest "fill your boots", to quote our fearless leader.
 
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I see both FTSE and German Dax are at record highs despite all the negativity associated with their economies. Of course they are still massively behind us valuations and FTSE has been basically trading around the 6000 level since 2001 and it only broke above that trend in last year or two.
I think investors could be running scared of us stock market valuations and trump effects
 
joe sod said:
I think investors could be running scared of us stock market valuations and trump effects
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It’s called the denial phase……..people keep investing, in denial there is anything going to happen such as a market crash in the us
 
Nordkapp said:
t’s called the denial phase……..people keep investing, in denial there is anything going to happen such as a market crash in the us
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Maybe its less so 'denial' and nore so 'taking a view'. Who knows whats going to happen.

Denial applies to facts, not speculation.
 
jim said:
Prob too early to say but hows it going?
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I put 5% of my pension into emerging markets on the 11 Nov 24 and its up by 1.61%. Not as much as global equities though during the same period as they are up by 4.33%.

I unfortunately missed the big rise in emerging markets at the end of September when China announced stimulus measures. If I'd moved earlier in Sep 24 I'd be up 12.04% which is similar to global equities for that period.
 
EM is going grand. I already had some there but switched out of anything north American. It's going up fine but I'm not concerned about missing out on short term growth.

Long term I think EM will do alright. I need an 8% return over 10 years to stay on plan. That should be possible. If an almighty north American crash transpires at any point I'll switch into something more All World.
 
I see European markets have outperformed the US markets since trump took control, is trump making the European markets great again?
Looks like we heading back to the period after dot com crash when both us markets and us dollar were way over valued and the next decade saw everything change with the rest of the world outperforming the us and big devaluation in us dollar
 
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