ero intervenuto solo sull'abuso del termine "bolla"
vedo che Smithers parla di terza bolla (dopo anni '20 e '90), lo cito perchè in passato mi è capitato di trovarmi in disaccordo e poi, naturalmente, aveva ragione lui
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The Case for Sticking With Stocks
How much money should you keep in the stock market even if you're worried that it's now significantly overpriced?
The answer: probably a lot more than you think.
Even when the U.S. stock market is significantly overvalued, long-term investors may be better off keeping the bulk of their portfolios in stocks, according to research conducted on behalf of a Cambridge University endowment.
That's based both on the long-term returns from equities, which have beaten alternatives such as cash or bonds, and the comparative difficulty of capitalizing on stock-market movements over the short and medium term.
Investors are understandably focused on valuations. The stock market's boom, which has taken the Dow Jones Industrial Average above 17000 from an intraday low of 6443 in March 2009, has raised increasing concerns about future returns and the risk of a possible correction.
"As with bonds, higher prices in stocks mean lower future returns," says Rob Arnott, chairman of Research Affiliates in Newport Beach, Calif., which advises clients on about $169 billion in investments.
By many measures, U.S. stocks indeed appear overvalued. Shares are very expensive by historical standards when compared with annual dividends, or average per-share earnings of the past 10 years, or the country's gross domestic product.
The market is trading at more reasonable levels according to a few other measures, such as compared with current levels of corporate earnings.
To be sure, many money managers insist that there is no way of knowing in advance whether the stock market is overvalued or undervalued. Investors, they say, should instead focus on issues like diversification, costs, their own risk tolerance, and their investment horizon—owning more stocks when they are young and fewer when they are older, for example.
For them, the stock market still remains the best investment around, especially for anyone looking to save for a horizon of 10 years or more.
Yet that may also be true even if you believe, instead, that the market is overvalued. That's the analysis of Andrew Smithers, a London-based financial consultant and chairman of Smithers & Co.
Mr. Smithers, whose 2000 book "Valuing Wall Street" anticipated the millennium's bear market, believes that U.S. stocks today are in the third biggest bubble in recorded history, exceeded only by those of 1929 and 1999. That's based on a metric called the Q ratio, which tracks the cost of replacing companies' assets from scratch. If history is any guide, he says, risks are high and likely returns comparatively meager. Yet he doesn't advise getting out of stocks completely. Far from it.
In 2008 Mr. Smithers and London University economics professor Stephen Wright conducted research into long-term investment strategies on behalf of Cambridge's Clare College, which was founded in 1326. His conclusion: Investors with long-term horizons should maintain a minimum of around 60% in stocks, even during equity bubbles.
The reason is threefold. First, he says, average returns from stocks have historically been so much better than alternatives that even overvalued stocks are likely to prove a reasonable bet. That may be especially true in the current environment, where both bonds and cash offer very low yields. (Using data on U.S. stocks since 1801, Mr. Smithers says stocks have produced compound average annual returns of 6.8% above inflation—compared with around 3.5% for bonds and 2.8% for cash.)
Second, Mr. Smithers says, history has shown that overvalued stock markets often become even more overvalued before correcting back down. Investors who get out first miss out on further gains along the way. And they may have to wait many years before markets return to long-term trends.
For example, those who got out of stocks in 2000 had to wait until 2009 before share prices hit their lows.
Third, he says, investors who try to move completely into cash when markets are up usually intend to buy back in when stocks have fallen to more appealing levels, but they often don't. Such an approach involves too much emotional stress, he says.
To be sure, all of this applies only to long-term investors who are able to withstand the stock market's volatility, Mr. Smithers adds. All financial experts agree that those who have shorter-term horizons, or who cannot handle too much risk, should hold a much smaller portion of their money in stocks. Limiting your exposure to stocks to 60% isn't the only way to cap your risks. Financial research has also shown that stocks of larger, higher-quality blue-chip companies have entailed lower risk than those in smaller and more speculative "growth" companies, and have also often produced better long-term returns.
), facendoti perdere cio' che i mercati hanno offerto finora (i.e. se perdi il +100% iniziale per evitare il -50% finale, tanto vale che metti tutto su un conto deposito... ).
