Broker Check

Time to Buy?

May 03, 2021
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We all have heard the investment mantra, 'Buy Low, Sell High'. It strikes me as amusing then, that in my 30 plus years in the investment business, the call volume from clients wanting to buy increases substantially when the market is high! And to that point, I have in fact been getting calls lately. 'Chuck, I have $10,000 in a savings account that I've been sitting on. I want to invest it all in Latest Craze, Inc.!' 

Take a look at the graph below. It shows a timeline of the Q Ratio, a measure of market valuation. The arithmetic mean value from the year 1900 to present is 0.80. Looking at dates where the graph line peaks it's easy to see that when the Q moves too far above 1.00, the valuation reverses and the market becomes relatively 'cheaper'. You can clearly see the peaks of the crash of 1929, 1968, 2000, and 2007. But look at where we stand today....

Caution may be indicated. For current conditions and where I think there are still opportunities, feel free to call or email.....