Is the stock market healthy or in a "bubble"?

[kentuck]

What could cause the bubble to burst?

Or is it rainbows and blue skies for as far as we can see?

[SWBTATTReg]

1. Good question. We've all seen it hiccup several times over the last six months or so, and ...

it still keeps going on. I'm like quite a few people, in that the markets have had a good run, time for a cool down, but what do I know? I know I am parked outside the markets w/ my money, and not in the running now with the markets...I think too high and time for a cool off.

[thegoose]

2. This is phony as shit

Dump has hocked the country for years to come. He threw us into debt for eons to pay off the one percent that he's so busy blowing. This is the usual Puke tactic times 100.

[Wounded Bear]

3. IMHO it's on the edge...

The college tuition debt situation is very bubble like.

I am not smart enough on it to say whether it is somehow "over valued" or not. But I don't think that the Fed and the big banks will not be able to prop things up much longer. I suspect the market is set for a decline. With any luck it won't be too precipitous, but I suspect it will be a deep one.

[democratisphere]

4. Close the Mexican border and we'll find out.

The fallout from drumpfonomics is beginning to take hold. A unicorn suggested it was a good time to sell.

[TheRealNorth]

5. Bubble

That's why Trump is clamoring for another tax cut for the rich - To keep the bubble from popping before 2020.

[WeekiWater]

6. Keep a close eye on the repatriation of corporate money.

It is a large part of what is holding the market up and is predicted to continue its impact this year. The manner in which most of the repatriated funds are being used, stock buybacks, generates artificial value. It was one of the biggest corporate give aways in the tax scam.

[smirkymonkey]

18. That is exactly what has been keeping it propped up over the past year.

Our company stock has never been as high as it is now, and a lot of that has to do w/ stock buybacks. It's a Potemkin Village of a bull market.

[ProudLib72]

7. It's a zit ready to pop

Full of pus that will trickle down on the rest of us.

[PoindexterOglethorpe]

8. It's not in a bubble.

It's been moving sideways for the last year or so.

Back in January when it was about 4,000 points below an earlier high, people here gleefully predicted a total crash. For a year or more it's been moving up and down not very much. I tend to see this as something of a rolling adjustment.

Meanwhile, my financial guy tells me that the fundamentals are sound in many areas, and lots of companies are making tons of money.

People here just love to predict a crash, and proudly say they're taking everything, or have taken all their money out of the market. The problem is that trying to time the market is truly a fool's game, and you're vastly better off leaving most of your money invested. Not every penny, because if nothing else you need to have cash for day-to-day expenses and living, as well as a reasonable emergency fund.

Something else to remember (and I think this is the most important thing most people don't realize) is that the market sets new highs, but it doesn't set new lows.

[DFW]

9. Hard to say, I must admit

It's REALLY tempting to sell what I've got and take the money and run.

On the other hand, after paying the taxes on the gains, I would have some money left over, but not enough to retire for the rest of my life on (unless I kick the bucket in the next six months or so).

Now....IF I had told my Republican-leaning brokerage who sits on my modest portfolio in the States to never call me unless I called them, I WOULD be sitting pretty. I had bought 500 shares of Apple for $38 in 1998. They called me about ten years ago and said the stock looked shaky to them, and wanted to sell it if it went below $190. It dipped to $189 and they sold it. Those 500 shares, a $19,000 investment then, would have been worth $2.8 million today. No use crying over that, so I haven't made a stock transaction since, and mostly treat it as a spectator sport.

[mnhtnbb]

16. I kick myself every so often

for not buying Apple when it was at $27 in the late 90's. Talked myself out of it because of Steve Jobs' influence on the company and his shaky health.

At least you got to ride it from $38 to $189!

My aunt made a killing on a little Seattle based company her son recommended to her. Microsoft. She used to kick herself for buying it in her IRA and getting stuck with the effect it had on the hefty RMD she had to take every year!

My best gain came from eBay. At this point in my life though my focus is on generating dividends and protecting capital. No more start ups in my portfolio.

[Tiggeroshii]

10. inverted yield.

not a good sign.

[shadowmayor]

11. What it is

The stock market is a ponzi scheme, pure and simple. Tan Liu has a nice little book about this.

[BigmanPigman]

13. My friend said it is legalized gambling.

A ponzi scheme sounds about right though.

[TheFarseer]

12. The last 40 years has been a bubble

Because of the rising national debt. It’s worse though now because of rising personal debts. Furthermore, super low interest rates, stock buybacks and 401k’s unnaturally pump more money into the stock market.

Edited because, that said, I have a lot of my savings in the market because it’s the only place to get a decent return.

[brooklynite]

14. Answer: It'll go up and it'll go down...

[PoindexterOglethorpe]

21. And it goes up more than it goes down.

Oddly enough.

[customerserviceguy]

15. My IRA

is in a money market fund. And until I withdraw it for my own use, that's where its staying.

[PoindexterOglethorpe]

17. The stories about not buying Apple,

or buying it and selling it too soon are illustrative.

It's time in the market that makes money, not timing the market.

If you sold everything when Trump was elected, or when he was inaugurated you missed out on a very large run up. Oh, and along with time in the market, diversification is crucial. Be invested in different kinds of things.

Those of you who are sitting on large gains and want to realize them, go ahead and do so. But don't sell everything, or you'll be like the people who sold Apple just because it dipped one dollar below $190.

[riverine]

19. Neither. The Price/Earnings ratio is about 17.

In 2000 it was in a bubble at 25.

When the ratio is 12-13 it is undervalued.

[MineralMan]

20. Who knows?

[GulfCoast66]

22. We're overdue a recession and that will cause stocks to fall

But I would not say it is exactly a bubble.

President Obama left Trump a sound economy with solid if not overwhelming growth numbers. The Republicans did just what you should not do in that situation, decrease taxes and increase debt.

As all this easy money washes it self out of the system, I would expect the stock market to fall somewhere near where it was in 2016.

But what do I know, I’m an agricultural manager! And I did not stay in a Holiday Inn express last night.

[Yavin4]

23. Except for the Christmas dip, it's traded between 24,000 and 26,000 for the past year

IOW, no one has any idea of where it's going.