While no one knows when the current bull run will end, it is wise to exercise caution at this point. When the winds change, it will be sudden and few will have seen it coming. There are values out there, but they are very hard to find now - like a needle in a hay stack.
Remember the time tested quote, "There are bold investors and there are old investors, but there are no bold, old investors." Long time investors have experienced these types of markets before and know the need to exercise caution.
A couple of metrics which cause me pause are the following:
- The stocks hitting new highs vastly outnumber those hitting new lows.
- The percentage of mutual funds in cash is very low.
- P/E's of the S&P are in the upper 30's
The time to prepare for a storm is before the storm. Not that one should stay inside, but one should watch out for falling objects, keep a raincoat in hand and dawn boots.
Be smart, be well-read, be aware and be successful
