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<p>[QUOTE=&quot;mikem2000, post: 2164029, member: 30574&quot;]Well, since you asked, the first reason is historical records. There have been many &quot;crashes&quot; in the past and they will continue in the future. Some were mild, some were severe. In 2008, that was particularly bad and that happened right on the heels of the technology bubble bursting in 2000. Now historically,&nbsp; the more severe ones are spread out a bit, so if you believe in being a student of history, we are most likely looking at less severe crashes in the near future.. Huge crashes are just not that common, so the odds are not in favor of another 2008 style downturn.</p><p><br /></p><p>Now there is some logic to why the more severe downturns are spread out a bit and that is fear. Many folks still have very painful memories of 2000 and 2008, and that puts a bit of a lid on the market. In 2000, there were so many folks in the market, you could not go anywhere without hearing talk about the latest hot stock, or how the markets are rocketing. Good old easy Al was right about irrational exuberance. The masses really drove the valuations to unsustainable levels. Now in current time, since there is still so much fear, that scenario of irrational exhuberance is much less likely to play out as many many folks are still too timid to enter the water.&nbsp;&nbsp; Many players also lock in profits as soon as there is a bit of a rally. You can see that in the day to day activity of the market. As soon as we start approaching new highs, you see the pullback. That is just the way I like it as it keeps things less volatile. It also minimizes the chances of the market getting out of control and setting up for a MASSIVE pullback. </p><p><br /></p><p>Now, you might say the markets are ALREADY out of control, but I would have to disagree with that. When you look at the market, the current levels were driven by valuation. We are trading at a 15 multiple which is only slightly higher that historical averages. A tad bit expensive????&nbsp; Maybe.... But no where close to levels where a massive pullback would be justified.</p><p><br /></p><p>&nbsp;For your final point of if&nbsp; smarter people are in charge now.&nbsp; I really ask this question to you. In times in the past, were the people smarter or less greedy then?????&nbsp;&nbsp; I truly doubt it, so&nbsp; that is really a non-starter.&nbsp; </p><p><br /></p><p>Does all this guarantee anything????&nbsp; Nope not at all, but we were not talking about guarantees, just the odds. As I said, I believe in playing the odds and throwing some diversification into the mix to cover your butt. In addition if the unexpected happens , I am still playing the odds for a full recovery, A full recovery is something that has happened 100% of the time, NO exceptions. So once again, the odds are in my favor.</p><p><br /></p><p>That is how I have always done it and it has worked out well for over 35 years of investing. Now Longnine, how about being brutally honest. How has your method worked for you????</p><p><br /></p><p>Mike[/QUOTE]</p><p><br /></p>

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