Comments by "JP 72" (@739jep) on "The Problem with High Stock Valuations" video.

Dollar cost selling / averaging is just another form of market timing. Don’t worry about ‘value traps.’ Just think about rebalancing into a portfolio comprised of low fee broadly diversified etfs with sensible allocations into the broad international market (market weights) , value stocks (weighted by size , value and other fama French factors ) and global bonds. Your allocation should be suitable for your appetite for risk , allowing you to stay invested long term and this allocation should possibly evolve with you as you get older and life circumstances / attitudes to risk change. Be honest with yourself about your attitude to risk , and don’t just use it as an excuse to time the market under the guise of rebalancing due to shifting risk tolerance. Coming up with rebalancing rules or asking an expert to help gauge your level of risk tolerance and think about your future financial goals may be worth while. The decision to move from a more concentrated portfolio into one that’s more broadly diversified may feel like market timing right now because valuations are so high, but ignoring valuations it is still a sensible decision and is backed by the best evidence and theory that exists in the financial literature. Just do it 👍
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@theWebWizrd thanks for the added thoughts. Yes I’m aware that some investors , and some particularly well known ones as you mention, hold a different view point. I simply disagree with them. I also think Buffet might not be has ardently opposed to EMH as he has vocalised in the past. But not sure 🤷‍♂️ ‘…. unless you personally bring something of value to the investing game you shouldn't expect your decisions to add value, in which case clearly some sort of index and DCA is the best way to go.’ I think here I might have to push back a little - I don’t think DCA would be a ‘theoretically’ correct decision even in this scenario - although of course , when you personally have to deal with the stress of investing a large amount of money at once - perhaps what is theoretically optimal isn’t always what is realistic when considering the emotions and other factors involved in such a situation.
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@theWebWizrd yes I would say that it is better to invest it all at once. I view DCA as a other form of market timing. That said , I don’t know if I’d have the intestinal fortitude to invest it all at once. I’ve had the good fortune of never had a large lump sum to worry about investing all at once ;). I just put away a bit of my paycheck each month depending on what I can afford.
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