E My Best Advice For Millennials To Get Ahead

I'm not sure we get to 3000 plus on the S&P 500, but I think the stock buyback bubble will probably carry us there by next year sometime.  That last 10-20% upside is a crapshoot though, given politics, tightening liquidity as indicated by bond markets and the "slow growth forever" global economy (read the article at that link if you read anything else, it's really important) {C} After that though? I'll just say "uh-oh." 


Here's a chart that shows how overvalued the stock market is even if you don't really know anything about the stock market. 

(Click on image to enlarge)


You can learn more about crashes and bull markets here on the Wiki superhighway.

Your Retirement Plan at Work

In your retirement plans (401k, 457, 403b, SIMPLE, SEP...), change the asset allocation on your plan balance to be 50% in a stable value, short-term U.S. bond or money market account. Keep it safe. At some point, you'll get a chance to shove it into a lower stock market.

The other half, leave in diversified equities with about a quarter international. If this market does get to about 3000, then move another 25% to the safe account you have picked out. 

For your contributions, put 100% into the safe account that you've picked out. There's no point buying more at these valuations. When the market has taken a digger, down 30% or more, then change your contributions to be more aggressive. 

Yes, this does require some tactical trading and for you to pay attention. The really good news is that this takes about 20 minutes a few times per year. These are asset allocation changes that once you get back into the stock market, you'll leave in for years as you ride the next recovery and whatever bubble comes next.

That article focuses on the PowerShares QQQ ETF (QQQ), which is based on the Nasdaq 100 index. The top holdings in that fund are:

Name % Assets
Apple Inc (AAPL) 11.64%
Amazon.com Inc (AMZN) 9.28%
Microsoft Corp (MSFT) 9.21%
Facebook Inc A (FB) 5.41%
Alphabet Inc C (GOOGL) 4.92%
Alphabet Inc A (GOOG) 4.19%
Intel Corp (INTC) 2.94%
Cisco Systems Inc (CSCO) 2.82%
Comcast Corp Class A (CMCSA) 2.15%
NVIDIA Corp (NVDA 1.87%
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Disclosure: I am long Intel (INTC).

Disclaimer: I own a Registered Investment Advisor - https://BluemoundAssetManagement.com - however, publish separately from that entity for self-directed ...

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