By HENRY BLODGET, Business Insider
As regular readers know, for the past ~21 months I have been worrying out loud about US stock prices. Specifically, I have suggested that a decline of 30% to 50% would not be a surprise.
I haven’t predicted a crash. But I have said clearly that I think stocks will deliver returns that are way below average for the next seven to 10 years. And I certainly won’t be surprised to see stocks crash. So don’t say no one warned you!
So far, these concerns have just made me sound like Chicken Little. The SP 500 is up strongly from where I first sounded the alarm.
That’s actually good for me, because I own stocks. But my concerns haven’t changed.
Earlier this year, for the first time, I even put (some) money where my mouth is!
In February, I changed the “dividend reinvestment” policy on my SP 500 fund. (I’m an indexer — I think stock-picking is generally a lousy strategy for individuals.) Specifically, I stopped reinvesting dividends.
I’m a long-term investor, so I don’t really care what stocks do next. This dividend change was a bet that, at some point in the future, I will be able to reinvest the cash