Key insights
- The author is hesitant to invest a $50k lump sum in the S&P 500 due to inflation concerns and potential market downturns predicted by financial institutions. Negative real earnings yield is cited as a bearish indicator. The question is whether to wait for market conditions to improve or invest now, given the desire to avoid a significant drop immediately after investing. This reflects broader investor uncertainty and risk aversion.
I have 50k USD which I was going to start investing for long term. Then war happened. Oil prices have rocketed.
Every financial institution is predicting an inflation soon, and it makes sense even if the war ended today.
This means a market down trend. Not sure how bad.
But if REAL EARNINGS YIELD trends negative, S&P 500 is due for a correction - not sure how bad.
As someone who was about to start investing in S&P500 before the war began, does it make sense for me to wait and see what happens? Or do I start now?
I don't want to DCA 50k. My plan was to get started with 50k lump and then DCA a portion of my monthly income. I'm not looking for absolute bottom of the market but since this is my starting point and if a drop is just around the corner, I wouldn't mind waiting a little.
How reliable are these financial predictions? And where do I position myself?
If you have nothing meaningful to offer other than crystal ball gifs and useless quotes or memes, please don't bother responding. I'm trying for some meaningful advice.
Thanks.