It’s probably also time to rebalance your portfolio. Sell some of the winners, and then buy some losers. While this is great for learning with some small allocation, do not forget the rules of the game and try to remain forecast-free.
In 2021, the S&P 500 hit 71x, which was a record high–the most in 26 years–and the second most ever after 1995 (77x).
US large caps that represent over 50% of world stocks remained the best risk-adjusted asset class.
Bogle noted that you could (reasonably) predict stock market returns with three inputs: 1. The initial dividend yield on the stock market 2. The predicted change in Price/Earnings (P/E) ratio 3. An estimate of earnings growth
As John C. Bogle noted, since 1926, the entry yield on the 10-year Treasury explained 92% of the annualized return an investor would have earned over the subsequent decade had he or she held the bond to maturity and reinvested the coupon payments at prevailing rates.