Stock Market Reaches All Time High | DO THIS NOW

A user on Reddit was wondering whether he should sell now. Given that the stocks are at an all time high now, will the crash come? In this video, I’ll show whether holding or selling is a better.
https://www.reddit.com/r/singaporefi/comments/pckpfd/afraid_to_exit_my_positions/

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0:00 - Intro

1:00 - Don’t rush to pay off mortgage
The user mentioned if he sold off, he will make enough to pay off his family mortgage. Don’t do that because interest rates are really low now. By paying off your loan, you will have no more loan, and more importantly, no more cash. Instead take as long as you can to pay off the loan, because your money can easily grow much more than just the 1% mortgage interest.

1:40 - Market is overvalued
S&P500, and many stocks like Google, Facebook, Apple are at all time high right now. If we check S&P500 PE ratio, we can see that it’s now around 35, while the average PE ratio has only been at 16. The last time it was this high was in 2007, and 2000, both right before a big market crash, and it took years to recover. Besides PE ratio, Warren Buffett’s indicator also signalled that the market is super expensive right now.

Analysts like Harry Dent, Jim Rogers, even Motley Fool thinks that a crash is coming too.

3:27 - The reality
No one really knows where the market will go in the short term, and anyone claims that they know, is lying. History has shown that analysts are wrong almost all the time. While it’s true that the market PE ratio and Warren Buffett indicator show that market is overvalued, it’s actually because the Fed has been pumping money into the market, and interest rates are low now.

4:32 - What would happen if you sell vs hold
First scenario, after you sold, and the market crashed. From 1928 to 2020, the market has gone down over 50% only 2 or 3 times, worst return in a year is around 50%. While there are many times that the market has dropped by 5% or more, there’s only 5% of the time the market has dropped by 40% or more. The average drop is only 17%. By selling you will potentially avoid a 17% loss on average.

Second scenario, after you sold, market went up. Data shows that market has gone up 74% of the time. A study also showed that, even if you timed the market perfectly, you will only get a slightly better return than just lump sum or dollar cost average. But chances are, you will time the market wrongly and will do worse off.

Data also shows that investing at all time highs over the long term gives better returns than if you invest on any day. If you miss even 20 best days out of 20 years, you will start to lose money. Another one, if you try to buy the dip, you will perform much worse off than someone who just buy and hold over the long term.

7:56 - My solution
Seeing so much data that shows that trying to buy the dip is a bad idea, I would advise to just hold, then continue to dollar cost average.

You could also sell covered calls on your portfolio to generate consistent income. Instead of the usual 0.3 delta, you could sell at 0.1 delta to reduce the chance that your stock could get called away.