Google can make any idiot like like a genius.
and closer to 30x if you normalize corporate profits. with minimum wages being hiked across the country and with rates only really having one direction to go, corporate profits have likely peaked.
uberbulls these days don’t really understand that they’re buying in at 30x. they prefer the simplistic, on-the-surface 20x earnings to make them feel better at buying in at “only” a 15-20% premium to the past.
Canadian RE is reasonably valued outside of Vancouver and Toronto. most cities outside of these two cities have average valuations of 3-4.5x after-tax household income which is about the long-term average in Canada and basically everywhere, including much of the U.S.
http://www.moneysense.ca/property/best-deals-in-real-estate-2015-canadas-best-cities-to-buy-in/
all fair statements.
-
trailing pe never makes sense to me, you are looking at whats happened not whats gonna happen. 2016 PE is 16.9x. https://ycharts.com/indicators/sandp_500_pe_ratio_forward_estimate
-
i agree with you that margins are high, and wages will prolly eat it up when it rises. but until i see it i aint busting a move.
-
lastly, until i see the cb hike short term rates to at least 100 bps. i degaf and say TINA. no cash no fixed inc no hedges. i got the cb put and the cb has already said they gonna do it gradually. plus everyone around the world still printing,
but yea no argument that we are in a mature cycle in the US, but we definitely not poppin bubblies.
As others have said, if you have the option of paying into a tax-advantaged pension scheme (401k or similar) then forget about market timing. Just invest steadily every month into a diversified equity fund and you are done. Check you account balance at most once per annum.
Is anyone NOT already maxing out their 401k or other retirement account?
Just in case you don’t know what I was hinting at, I’d suggest looking into LendingClub for some of it. If you are an accredited investor, there are other options out there for loans as well. I would only venture into that depending on your sophisication. While debt markets have been impacted by the current environment, consumer debt hasn’t been impacted as noticeably as the other asset classes IMO
Depending on my situation that year, I may not max out my retirement account because I want liquidity to invest in opportunities. I don’t want to have it all locked up in retirement accounts (I can always move it over if I don’t find opportunities in businesses or real estate).
But it’s $18k a year. This is probably nowhere close to your total yearly investment. Plus, with its tax advantage, the 401k would have to significantly underperform the other opportunities on a risk adjusted basis for you to forgo this. You could invest $100k in LendingClub probably, and not even notice the 401k contribution.
Forward PE never made much sense to me. It’s not based on what’s going to happen, it’s based on some estimate that a fortune teller got by looking through an extremely cloudy crystal ball (or Magic 8-Ball, whichever is more convenient at the time).
Trailing PE gives you the facts. Leading PE gives you an opinion.
I only max out the % I get in matching contributions. yea i get the whole tax saving blah blah. but I just don’t give a damn and I want to spend it now.
Personally, I’m not a real big fan of qualified money. It does have its advantages, what with income not being taxable. But investing in taxable accounts definitely also has its advantages.
If you plan carefully, you can often invest tax-efficiently in a taxable investment account and achieve similar results to tax-deferred compounding.
You can harvest tax losses.
You might be able to withdraw with little or no tax burden at all.
You have more control over your tax bill in retirement.
And #1 - your heirs get a step-up in basis instead of a huge tax bill for five years after you die.
When giving clients financial advice, I only really recommend that people save in qualified plans if they have plenty of non-qualified savings first. (The exception being, of course, if you get a match. Then you’re throwing away free money.)
I’m the same way. I only contribute up to the max company match in my 401k. I also max out my Roth IRA, since I hope to one day be above the income limits. Save all the rest in a taxable account.
Personally I’d rather pay the tax now and get it after tax and be done with it. As long as I’m living in the US, I don’t see my tax rates going down in the future. If I lived in a high tax area like NYC, I might have a different view, but Texas is as good as it gets onshore. Plus I value the flexibility to invest/use the money however I want, and more importantly if I ever move abroad, take it with me easily.
Why won’t it matter if it’s in a gov’t registered acconut?
Hmm, so at a 3% match could max out if you made $600k. Or 6% at 300k.
My company gives generous matching contributions, which means that just by taking full advantage of the matching contribution, my annual 401k contribution is also maximized. I would be more frustrated, of course, if I heard that someone was not contributing up to the company matching percentage.
OP: for the 401k just get a diversified equity portfolio and don’t worry about timing.
For investing cash, determine your future cash needs. Then, invest according to time horizon.
Right now, I’m investing in some select credit and EM and the rest is in my funds.
^I’m with you on this. It’s kind of ridiculous the restrictions that they place on all these things. Why should taking money out of a 401k to put a downpayment on a mortgage be penalized?
If you use 401k for house downpayment, you need to pay it back plus interest. It’s like borrowing from yourself - I wouldn’t call it a penalty. Just a mechanism to stay on track with retirement savings.
If you use 401k for house downpayment, you need to pay it back plus interest. It’s like borrowing from yourself - I wouldn’t call it a penalty. Just a mechanism to stay on track with retirement savings.