Thanks for you insight, what you explained is in line with my thoughts, but it is good to see that someone else has the same thoughts.

Thanks again.

I can’t provide individual investment advice although I am always glad to share my outlook on the market.

From a macro/fundamental perspective, I think one of the strongest cases in decades can be made that the R/R for equities in the coming months to years is unfavorable.

From a technical (charting) perspective, it also appears to me that the R/R is not attractive for equities and while I still can’t rule out my alternative “marginal new high before the next major leg down” scenario, that is still my ‘best case’ scenario although that would mean that for a longer-term investor, it wouldn’t be worth it to try & pick up a few nickles (positioning for a marginal new high in the stock market) in front of a potential steam roller.

Of course, there’s that whole “I’m just dead wrong” thing & the stock market climbs another 30%+ percent from here so take my opinion & current read on the stock market FWIW while factoring that in with your outlook, time horizon (on your 401k), risk-tolerance, etc..

My best guess & current read, at this time, is that the stock market likely began a new multi-year & possibly decade+ bear market in late 2021/early 2022 (marginal new highs to come or not). It also appears to me that Treasury yields completed a 38+ year secular bear market (which was the primary driver of the above-average returns in the stock market over that period) at the COVID lows in early 2020 with interest rates now in the first leg up of a new secular bull trend in rates (which will result in a bear market for bonds as well as stocks). However, I think that bond yields are at or relatively near a tradable top which (if correct) means that there will likely be a swing/trend tradable rally in bonds soon which will coincide in a counter-trend pullback in yields, thereby presenting a tactical trade in Treasury bond funds within a 401k, if that plays out.

Bottom line, probably not a good idea to make “all or none” bets on the equity & fixed income allocations in a 401k, especially if one’s time horizon is a decade or more (those close to or in retirement might opt for a very low allocation in equities) but nothing wrong IMO with under-weighting equity exposure during when the fundamentals (Shiller PE ratio vs. historic range, etc..) & the technicals indicate the stock market is likely to see sub-par or negative returns going forward for the foreseeable future.

Personally, I think tactical asset allocation (increasing & decreasing equity & fixed income exposure based on the technicals) going forward, with significant positioning in cash (money market funds) when the outlook is unclear, will be the best way to navigate & even flourish from what is likely to be much different from the great buy & hold market that the previous 4 decades of steadily falling interest rates provided for the stock market.

It looks like the markets are taking the next leg down. I know it is not your thing but do you have any advice for long term (401K) accounts.