Skip to Content
Rekenthaler Report

The Taxman Says, Stay Invested

Timing the stock market is difficult enough, even without the IRS' contribution.

Taxing Matters
I have never been more wary of the U.S. stock market. The perils are obvious. The economic expansion is so very old; the Treasury yield curve is (moderately) inverted; the Bundesbank expects a German recession; and the S&P 500's cyclically adjusted price/earnings ratio is almost 30. It seems that corporate earnings will be squeezed, but stock prices have not anticipated such an event.

My instincts urge retreat. However, psychological considerations and the IRS suggest otherwise. Market-timing is a mug's game, particularly in taxable accounts.

To view this article, become a Morningstar Basic member.

Register for Free