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I have exactly the same problem. Michael Burry (notable for profiting off of the 2008 housing crash) is predicting an enormous index fund bubble, or the "safe"

I have exactly the same problem. Michael Burry (notable for profiting off of the 2008 housing crash) is predicting an enormous index fund bubble, or the "safe" investments that people are so fond of in 401ks and IRAs. Even the market indicators like the S&P 500 are somehow outperforming the prior year. High-risk investments and stock picking is high risk and a bad idea; index funds are a bad idea because they're overvalued; cash is a bad idea because of the inflation risk; where should a young person (<40) put their money? I wouldn't even mind hearing "there is no safe investment right now, buy real-world assets like land and weapons and wait for the crash", but I only hear that from gold-standard idealists, not from professional investors. What do the investors recommend?

mmmm2 6y ago
I don't know how sophisticated of an answer your looking for, but I can tell you what I'm doing. 1. I have a standard portfolio of index funds split between stocks, bonds, real estate and cash, weighted more into bonds. The bonds and cash weight is because I think the market will tank at some point, the stocks are because I might be wrong. 2. I rebalance periodically to take profit from whatever is doing best. 3. I've tried to broaden my investments further by adding a "market neutral" fund from Vanguard, and an asset fund. That's the basic setup. As I said, I'm pessimistic about the stock market, but not out of it, so I've based my allocations on that. I'm not too worried about index funds being a bubble themselves. If the market goes down enough to trash index funds as a class, there won't be anywhere to hide... That's why I'm trying the market neutral fund. I'm hoping it won't correlate with the stock or bond market. That's my big concern, that everything will crash at once. I am somewhat concerned about the Fed's actions, so I have added an asset fund in case we end up with more inflation than people expect. Personally, I think we will have a crash, but I've been wrong so far. I just don't see how the market will go up rapidly for another 5 years, and if it doesn't, that doesn't justify the current prices, but who knows...
scsilver 6y ago
Im putting some everywhere, and looking to take out a loan to put some cheaply loaned capital into desirable real estate. Crossing my fingers.

mmmm2 6y ago

I don't know how sophisticated of an answer your looking for, but I can tell you what I'm doing. 1. I have a standard portfolio of index funds split between stocks, bonds, real estate and cash, weighted more into bonds. The bonds and cash weight is because I think the market will tank at some point, the stocks are because I might be wrong. 2. I rebalance periodically to take profit from whatever is doing best. 3. I've tried to broaden my investments further by adding a "market neutral" fund from Vanguard, and an asset fund. That's the basic setup. As I said, I'm pessimistic about the stock market, but not out of it, so I've based my allocations on that. I'm not too worried about index funds being a bubble themselves. If the market goes down enough to trash index funds as a class, there won't be anywhere to hide... That's why I'm trying the market neutral fund. I'm hoping it won't correlate with the stock or bond market. That's my big concern, that everything will crash at once. I am somewhat concerned about the Fed's actions, so I have added an asset fund in case we end up with more inflation than people expect. Personally, I think we will have a crash, but I've been wrong so far. I just don't see how the market will go up rapidly for another 5 years, and if it doesn't, that doesn't justify the current prices, but who knows...

scsilver 6y ago

Im putting some everywhere, and looking to take out a loan to put some cheaply loaned capital into desirable real estate. Crossing my fingers.