I gave up on that game, too much stress and I had a couple close calls trying to time the market. I moved all my money back into index funds at the beginning of the pandemic and now I don't even look. I just keep dumping money in and hope that when I'm ready to retire there's enough.
I don't agree about houses, either. It seems unsustainable, yes, but I'm having trouble finding the broken fundamentals. It seems like the only 'fix' for prices is building more housing, and that isn't a correction.
No, houses aren't next in line. Crypto has no value but houses serve a purpose and there is real demand and need for it.
Housing market might correct a little but you won't see a $1M Los Angeles house going down to $300k. Maybe $925k but no further than that. There is no time in human history housing crashed and never came back. It moves down a little, then goes up again. Remember 2008.
> I have been sitting on cash since end of last year,
How do you feel about the recent spick in inflation? I have also been sitting on some cash for a year, and its buying power has definitely fallen. I find it now hard to see if prices will fall or wags will go up, so the cash I have will be of less relative worth.
Imagine if you had invested that cash in Rivian last year. You would be down about 80%. Compared to the ~8% inflation we have seen in the last year, suddenly holding cash seems like a pretty good deal.
The Fed is basically trying to control inflation by inducing a recession. Holding cash is generally ill advised during times of high inflation, but holding assets during a recession can be pretty painful as well. At least with cash, you can buy the dip if you are so inclined.
If you haven't already, take a look at I Bonds. Those are safe, and have returns tied to inflation. Also, it is probably a good idea to start thinking about how and when you might want to invest your cash. It already feels like there are some good deals out there. But if inflation persist and interest rates keep rising, I can only imagine things will get cheaper still.
Stocks, cryptos, houses: people kept buying no matter the price, even though, it was so obvious that those prices were not sustainable.
And we are finally seeing a proper correction. I think, houses are next in line.