What do you buy when stocks are all overpriced?

Question

Already have some bear/short funds, gold and bonds.

Don't really want any stocks at these prices.
What else is there?

Answer 1

I go to bankrate.com and get a money market fund. The problem at the moment is that inflation and money market rates are even so with taxes you must lose money.

I disagree that there are no undervalued stocks, but they are remarkably hard to find.

Consider AHR, BAC, BRK-A or BRK-B,GCI, maybe LNC, SAB, SAF, maybe SEB, definitely TGIS.

Also, in lieu of bear/short funds, consider puts directly. Only long Treasuries should be considered an investment counter to stocks. During periods of extreme stress corporates become very illiquid and so you cannot use them as a funding source because you may not be able to find a buyer. Short term bonds/CDs do not provide enough of a premium over money market accounts to consider.

Gold has been shown to be poorly correlated to inflation and moves instead with global conflict levels. It is an alternative currency.

Consider signing up for e-trade's global trading accounts. The US market is overall overvalued, I would agree, but the global markets are not.

A month before the NASDAQ tanked I sold out all my equity positions because I couldn't find any stocks at a fair price. I took my IRA and bought a 7 1/8% fixed rate annuity. It was a nice investment considering what happened to most everyone else. I should have bought bonds, but I wasn't sure which way rates were going to go and I was afraid that my reinvestment rate would be lower and that the market would remain high.

Answer 2

If you've got the buts you might want to think about "puts". Bonds are probably going to be destroyed soon with the collapsing dollar. You're golden with the gold but maybe that could be a good place to load up on. Some junior Canadian explorers might be good. Be careful with any funds most especially any hedge funds! What goes in doesn't always come back out. All stocks are not overpriced just the stuff that's been hyped up to the max.

Answer 3

If you have some shorts be patient until the time is ripe for picking. I remember the dotcom crash in the year 2000 ,the NASDAQ index was at 5000 and I told all my friends to pull out and wait. It took 6 months from when I bailed out and I was laughed at, but sure enough it came all the way down to 2000. So wait for your opportunity.Warren Buffet doesn't buy if prices are absurd so why should you?