2021 stock too high to invest ?

A lot of people said it was a bad idea when the S&P 500 rebounded back to its pre pandemic highs of 3200, after having dropped to 2200.

Now it's above 4000.

Similar for the TSX.

*shrug*

I keep making regular contributions to my couch potato portfolio. Things certainly looked rough during the COVID plunge, but I just let it do its thing given my investment horizon is at least 20 years.

hpad06 wrote: ↑ I panic sold EARK during recent correction as I bought them all time in , and did not buy back at the bottom, now I have half in cash and some in VFV, QQQ, EAFT.

People say this year is bad for all in stock market, but I have now lost idea of how to invest the rest of my cash in RESP/RRSP/TSFA. Investing in individual stocks are super time consuming and hard to keep track of.

I also heard DCA is usually worse than lump sum, but is putting the rest cash in VFV/QQQ as lump sum a bad idea for now?

So far it has been a good year for stocks. The TSX is up about 10% and the S&P500 is not that far behind. I am not sure where you are hearing your information from that can be relied upon to confirm the future for which nobody knows what will happen until it has happened. It is only after the fact that anyone can determine whether DCA or lump sum is better. It is somewhat pointless when it is after the fact. It all comes down to temperament. Do what allows you to sleep at night. Panic buying and selling can't be good regardless of market conditions. It is a good recipe for buying high and selling low.

Never good to panic sell after buying high.

Just look at the stocks with huge drops. Eventually they all recover somewhat.

It is just we end up buying the wrong stock and start to sweat as you see the long and deep reds.

Only sell at loss if you found another sure win opportunity. If not, just bag hold for a bit.

Conventional investment wisdom is...
If you are in it for the long term 10 + years... Youre fine.
If youre in it for the short term, then the markets shouldn't really be a consideration unless you are willing to take big risk. That risk is if you need to take out the money and that time happens to be during a down turn.

You can mitigate this by going for a diversified strategy across several sectors and regions. As well as strategies like dollar cost averaging. Also minimizing cost by using low MER ETF's.

Just Googled it for fun: the S&P500 hits a new high, on average, 25 days per year.

Is the stock market too high to invest? Only if you don't have time, need the money soon.

You may want to review your risk tolerance. If you're going to panic sell everytime your investments take a substantial loss, you won't fare well.

thanks for your advice ! I have bought quite a few stocks in the past months, now many are in the red, and found hard to back out. ( PSTH, FSLY, TDOC , ARKF etc)

I find it too hard to track individual stocks as I have spent countless hours trying to keep up with the market, but turns out it never ends, and I can never get a comfortable level with my stocks, as stocks do not always go up as I original thought.

I spent too much time trying to figure out how to do swing trading, but turns out I do not have the time or reliable system to do it , and it is indeed timing consuming and stressful

I tried to do it as a long term investor, but turns out fundamental and valuation is hard in the current market, as stocks are either priced in or way over value. PE, DCF and valuation plus keeping up with all the updates are so hard for individual like me.

I want to switch back to ETF, but considering current market, I don't know if ETF is better or go with individual stocks. Care to share how you manage your stocks ? I found it really time consuming to monitor 20+ stocks all the time, as I cannot decide when to take profit and when to take the loss without understanding what happen to them first. But by then the price might have already priced in.

My account is still bleeding as I am afraid to chase the high flying value stocks, even spy goes higher, my account keeps going lower. I feel I am stuck, not sure how to get on the right track.

The market is in a bubble if you look at fundamentals and earnings multiples. The market is priced for perfection at this time.

Now, here's the reason why it's up. The Western governments have been printing money non stop into the economy... Therefore. Money have to go somewhere .. hence.. stock market.. this is the short answer

I have learned I cannot hold individual stocks, and even certain ETF’s that chase sectors can be problematical for me. We have come up with a plan for what our goals are, what ETF’s will fit into that plan, and have stuck with it. Have to say it has been incredibly liberating, and days can go by now without even thinking about the markets.

Know your limitations and work within them, have a plan, keep emotion out of it are what I hear the veterans here repeating. Don’t try to reinvent the wheel, learn from those that have already done it.

hpad06 wrote: ↑ spy goes higher, my account keeps going lower.

maybe buy spy?

More advice along the same lines as others here, I think it was Benjamin Graham who said “the markets can stay irrational longer than you can stay solvent”. People were saying that we were in a bubble back in ~2016. Maybe we’re in a bubble now, if it were easy to call it wouldn’t have such dramatic effects if/when it pops.

It sounds like you need to reassess your risk tolerance, perhaps consider putting the meat of your investments in something nicely diversified like VGRO/VEQT then putting smaller amounts on more concentrated etfs followed by even smaller amounts in individual names. Amounts in individual stocks to have fun with but not freak out if they don’t work out.

It’s pretty hard to time the market, it might be easier to make some decisions that you’ll be ok with regardless of what the market does. You’re right that generally timing the market is statistically a worse choice than time in the market making hasty choices is the worst plan of all. Better to split your money into smaller quantities and dollar cost average so if the market tanks you just get a deal. People like dollar cost averaging because it gives them some comfort and allows them to stick to the plan. I get the sense it’d be useful to you too.

looking at you risk tolerance and panicking about everything, how about a GIC?