Earlier quoted context omitted.
> If you're looking at this and wondering when to get in, to bargain hunt essentially, and you're asking yourself questions like "today? next week?", you need to step back and think again. > Bear markets are paved with the blood of optimists. I agree with exercising caution in the sense that trying to time the market is difficult and probably inadvisable in general, but I don't agree that people should be careful spe…
Cash may be a perfectly fine choice over the next year. You don't have to invest in something if the conditions are not right.
In order for some people to beat the investment average by timing the market someone else must underperform the average. Active investment management is in general a zero-sum game in which you compete with a bunch of math PhDs at hedge funds that do it as a day job (and even they have a tough time). Of course you can win if your own analysis of when the conditions are right is better, but trying to do so is usually not recommended for individual investors.
Holding cash sounds simple but if it goes up from here how do you know when to buy? If it goes down from here how do you know when to buy? And if you never buy, over a couple decades you will almost certainly do worse (Japan is a different case because at the bubble peak their stocks were measurably more overpriced compared to almost anything else in history including where the US market is now). In the end I think the only simple thing is the advice most economics professors would give which is to give up trying to time the market and just buy a low-fee mixed stock/bond index portfolio (with the ratio based on your risk tolerance).