There are too many distortions in the current economy.
After 15 years of:
- Zero interest rates to prevent short term recessions and postpone the pain until the future (the future is now).
This caused asset bubbles in all asset classes: Stocks, Bonds, Real Estate, Commodities, etc.
- Quantitative easing (several rounds of this). Governments printing trillions of new money.
- Household credit card debt at a level never seen before in history,
- US government debt at 31 trillion dollars (how are our children and their children ever going to pay this back)?
- Bank failures of regional banks continuing.
It obvious stocks are the place to be for long term gains. I get that.
But these distortions in the current economy will at some point wreck havoc with all asset classes sharply declining (aka Crash) before things go back to normal.
I would prefer to stay on the sidelines in a Money Market with a safe annual return of 5%+,
and wait for the crash to happen, and then buy stocks, real estate, etc at very low prices, and avoid the huge losses of holding the assets during the crash.
Great theory. And you know when a bottom has been reached, how?