Chronicles of fat years [2024-2027 Edition]

Cortana indicator alert!

I’ve been doing the opposite. I had almost no exposure to EM and recently have been adding as EM is out of favour compared to the US and ratios of EM vs US valuations are a bit out of whack. Understandably due to negativity on HK and China and bullishness on US Tech/AI.

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That‘s my thought as well actually. A prolonged bear market would be way more beneficial actually for me (granted it‘s not an economic crisis where I lose my job), as I‘m still relatively early in accumulation.

Even mire bloated valuations are actually very bad for compounding. Expected returns are already pretty depressed at the moment.


Screengrab from a Pensioncraft video, each bar represents a large investment bank’s forecast for the S&P500. It’s pretty clear they are fighting last year’s war, 25% spread for 2024 is pretty wild.

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In a prolonged bear market, you‘d wait for stocks to become even cheaper, i.e wait for the end of said bear market.

What you‘d „need“ is a short, veritable crash.

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We just had one already with Covid!

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No I would not wait, I would continue to dca every paycheck like clockwork.
I just need cheaper prices, with an eventual recovery.


You forgot to add to your wishlist that once you stop contributing and start withdrawing, you’re fine with the prolongued bear market being over and for it to turn into a multiple decade bull market … :wink:

By the way, if you think of investment opportunities as “it’s a market of stocks” instead of “it’s a stock market” you will almost always find companies that seem in a prolonged bear market and DCA those instead of “the market”.
If that sounds like stockpicking, it probably indeed is. :smirk:

I’ll see myself out again.


I struggle to find anything now. A few appear on my screeners are things like PHM which are over double the price from when I sold them. Actually, you just made me by CSCO. It has been on my screen for years and I always refused to buy it but seeing that it is one of the few things that is on there, I thought I might as well buy.

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I replied here as it seemed more related to stock picking than the Chronicles of fat years (although, IMO of course, the two are the same … :wink: ).

Interesting graph :thinking: :grin:

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Shorter time frame, but I like this graph (apologies if it has been posted before and that it doesn’t include 2024-2027 yet*):

* Even though my prediction is that 2024-2027 will continue to look like the past.


Now someone to retitle it to “Reasons to buy” and they’d look like geniuses. Bogle’s message: ignore the noise never sounded better.


There’s some NASTY sideways periods in there (1966-1980, 14 years, 2000-2013, 13 years) - that’s my biggest fear frankly, not a flash crash but a soul-destroying grinding 5+ year period of trying to get above water again. That’s where shifting allocations could be the buffer, though it’d still need brass balls.

What’d be interesting to see side by side though is how a global portfolio did in the same timeframe, probably better is my guess :slight_smile:


My personal antidote to this is focusing on steady and reliable cash flows paid out instead of total return.

If the price of my portfolio goes sideways, but my paid out returns are steady or even growing, I couldn’t care less about price. If anything, I can buy more income at cheaper prices.

This is of course influenced by my need to consume part of the cash flow produced by by portfolio now.
If you only care about total return over multiple decades (and it seems, historically speaking, you might need those multiple decades to get across those price wise sideways multiple decades markets), you might be better off from a total return perspective.
If indeed you managed to hold on to your sideways - and occasionally severly dipping - portfolio.

YMMV, of course.

Very true, I also liked what you said here, just didn’t want to muddle the other tread with a reply.

I am personally fond of the idea of dividends as a means to either fund some costs, or direct to a different investment as you say. It’s just that they need a lot upfront before they can get going, plus tax inefficiency. Currently they cover my quarterly trading costs, and that’s good enough for me, but I plan to continue building on VWRL (which is not a high yield ETF as you know) to eventually make enough through them to fund more stuff.

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That‘s why I have some allocation to managed futures.

You refer to KMLM? Does it move the needle for covering living costs etc or is it a defensive play? I like how it’s almost inverse to the S&P500.

Exactly. It tends to do well in bear markets and still decent or flat in bull markets.

Backtests are eye-wateringly good with it (of course should not put much importance here). And it‘s tax free (so far, see managed futures topic) in Switzerland.

time-series momentum trend following also has lots of good academic backing.

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Anyone looking at china etfs like KWEB (china internet) and KBA (chine A shares 50) given they seems to 60-80% below their highs from mid 2021. Really taking a punt. Max 5-10% of portfolio.

Before somebody mentions, here are the 2 factors:

  • meddling from china govt: that has happened already (ongoing) so incremental poking not that big of a worry
  • China attacks Taiwan (or even China US conflict): this little gamble of above ETFs would be the least of my worries.
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You never know with China how much share dilution they will do and other stuff.

I‘m uneasy enough with the part in my market cap weighted allocation.