Post of the Day
August 16, 1999
Eyes on the Wise Folder
Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light.
I ran across an interesting article in Money Magazine this weekend.
The article starts with "For 13 years... stock prices moved up in line with strong gains in corporate profits...The result: Stocks are 20% overvalued."
The article suggests you sell 25% of your portfolio to hold in bonds or cash. Some of the assertions the article makes are:
"(When stocks have historically been this high), their average return over the next 3 years have run only about 1% annually."
"Blue chips and large technology stocks are overpriced, and corporate profit growth will likely slow-or even possibly turn down- over the next 12 months."
"Further gains (in productivity and profits) will be increasingly hard to come buy since business have squeezed costs almost as much as they can."
So, there you have it folks. Sell your stocks now to avoid the certain downturn.
What's that you ask? When was the article written? Oh, August 1997. Why do you ask?