Key insights
- The author expresses concern about investing in the S&P 500 at all-time highs due to negative news, low consumer sentiment, and AI bubble fears, despite a financial advisor's recommendation. The author's risk aversion, driven by near-term cash flow constraints, suggests a potential drag on market participation, reflecting broader investor uncertainty and potentially contributing to downward pressure on equity valuations.
I am not a trader and never will be. I am interested in parking money and watching it grow. I’m currently in a weird spot where I have decent savings but I’m cash flow negative (daycare is fucking expensive). I will likely not be cash flow positive until 4 years from now.
Doing the calculations I have enough savings to get through this period and have a modest rain day fund leftover assuming no raises, we keep our jobs, no big expenses and being financially disciplined.
So what do I do with my savings in the meantime? On one hand the S&P just hit an all time high. On the other hand the whole market fluctuates wildly with the news and the news is up and down every day, except for some reason the market stopped caring about oil recently. I’m also worried about an AI hype bubble though I do believe AI is the real deal.
The financial advisor says it’s ok to park some money in S&P that I won’t need for 2 years and not to worry about AI bubble.
I also see that consumer is the lowest it’s ever been. I see people saying that the market is over extended more than the pandemic and dot com bubbles according to the buffet index.
I have been avoiding putting any money in because I’m believing the negative news more than the actual market trend.
Am I smart to be safe or am I being stupid?