Future Investments in Bull Market

For "truly big" questions such as this, you have to formulate an opinion on issues such as:

https://en.wikipedia.org/wiki/American_decline

You predict:

there will be a major correction to the stock market some time in the near future

If one really thinks that,

1. You could go long, but, keep tight stops (not a perfect strategy, but it will "probably stop catastrophic loss"

2. Depending on what you mean by "near" future ...... short it.

However,

3. Many people would say, on a long time scale (i.e. a lifetime of investing), there will be plenty of pullbacks, even severe ones. "So what", that's the very point that "in the long term it goes up".

Hence,

• say the basis is 100 today

• it runs up to 200

• as you wisely and correctly predict, there's a disastrous pullback to 70

• then in merely 10 or 20 years, it is up to 500 or 1000

If those four things happen, what's the best thing anyone can do? Indeed, buy today at 100 and forget about it. If you try and guess where the "dip to 70" is, you'll miss it all.

(I don't advocate or anti-advocate that view, I'm just outlining it. Thus, if you believe in "American Decline" {perhaps blame wikipedia?!} you would think that view is stupid. ie, in the next 30 years America will become as crap as other failed empires ... British, Russian, Roman etc. In that view, it would be throwing your money away to put you "100" in today.)

debt is and will increase with this new administration

Faster than during the current administration?

My fears are ... there will be a major correction to the stock market some time in the near future.

1. You can't lose money in CDs, TIPS and Treasury Bills.
2. The market recovers from corrections relatively quickly (where "relatively" is relative).

Thus, the question is: how conservative are you?

My money is about 50/50 bond/equity funds consisting of:

• the least junky junk bonds - intermediate length,
• dividend stocks (on the presumption that they're high quality companies),
• consumer staples (you're always going to need toilet paper),
• municipal bonds - intermediate length, and
• the S&P 500 (due to the limitations of my 401k).

The goal is asset protection (won't fall as far during a correction) with growth potential (but won't grow as fast during a bull market) as I stare at retirement. Of course, I well understand that my strategy might utterly and completely fail, especially if the economy really tanks, and I accept that risk.