Anyone else scared to deploy capital into the markets in their personal portfolio?

I'm sitting on a lot of cash right now but I'm too befuddled by what's going on in the markets to deploy any of it into risk assets. On the one hand, we have unfettered speculative mania occurring everywhere, even with valuations at all-time highs. Under normal circumstances you would think we're heading for a major correction soon, but easy central bank policy and government spending are showing no signs of slowing down, which makes me think this bull run might still have legs. I don't want to be sitting on all this cash due to inflation risks, but I'm afraid to go near a lot of equities with valuations where they are. Two things I'm looking into are emerging markets and domestic energy, where valuations look more reasonable, but I'm still uncertain.

What are other people's thoughts on the market, and what are you doing with your personal portfolio?

Comments (43)

Most Helpful
Feb 3, 2021 - 11:37pm

The fact that energy is so out-of-favor in the mainstream, for the reasons you described, is exactly what makes it an attractive long-term buy to me as a contrarian investor. If demand rebounds as the economy reopens, there could be a change in sentiment that pushes energy stocks higher. And I think you're massively overestimating how quickly the 'clean energy revolution' will be here.

  • Analyst 1 in IB - Ind
Feb 4, 2021 - 12:13pm

You're right, severe lack of institutional investment in O&G (rightfully so the way many of these companies burned through capital with little to no returns) is going to lead to a real supply shock, global demand will pick up quickly and supply will fall behind, crude prices are set for a strong rally in the next couple years and O&G is pretty much at the bottom of the cycle right now, leading to a pretty strong contrarian bull thesis imo.  Renewables / Energy transition is hot and valuations are pretty insane right now as capital markets have absolutely flooded into it, not sure how this will materialize in the near term future, from the way I look at it  a bubble is forming. 

Feb 4, 2021 - 2:57pm

Phased out when? In 30-50 years? Seems silly to assume there are no returns to be made in the meantime. Especially when prices can easily increase to the 50-60 range. Otherwise, why don't all E&P companies wind down and shut down immediately?

  • Analyst 3+ in AM - Other
Feb 4, 2021 - 12:38am

Yup, that's why I'm only 60-65% invested but my holdings are "risk on". Half my cash gets invested at the next 10% dip, the other half if it drops 20%. If markets keep tanking, I throw any extra cash from paychecks / bonuses to average down.

Democrats are in charge and gonna spend some big money, hopefully it keeps markets pumping 

Feb 4, 2021 - 10:10am

I am 50% invested as of this week. Took some profits on my investing since 2014 and am still buying in every 2 weeks in my 401k. Retail is still buying, but the volume tells me that institutions may not be. They are probably selling. I'm at a F100, so I don't really have preview into banks, but indicators (DXY) seem to be saying GFTO

  • Analyst 2 in IB - Gen
Feb 6, 2021 - 1:20pm

I think inflation caused by rising labor cost is a good thing. Means more people are get paid well.

Feb 4, 2021 - 3:14pm

I am pretty bulled up on cyclicals/risk assets in the near term. 

I expect some small corrections along the way which will be bought quickly. 


Feb 4, 2021 - 3:54pm

You say you are afraid of equities because of some valuations, but there are still fundamental stocks existent in the market that are underpriced. The two that come to my mind are Callaway Golf ($ELY) and Tattooed Chef ($TTCF). Think you need to go look up those economic formulas again, because the money that the Biden stimmy will put into the economy will again end up in capital markets. If you think a crash is coming at the same time as people get access to more money then I'd simply claim that you are out of touch with reality - crashes and liquidity do not go together.

I would just take the things that are getting legalized in the U.S., the sectors that will blow up under Biden and just make plays on them. Here, let me solve it for you:

1. Legalized sports betting - DKNG and PENN;

2. Legalized/decriminalized marijuana - either MSOS ETF or Trulieve/Curaleaf/CrescoLabs for U.S. exposure and Tilray/CanopyGrowth/Aurora for Canadian exposure;

3. Green energy - ICLN ETF or take your pick from subsectors - fuel cells/hydrogen like Ballard (BLDP), Bloom (BE), PlugPower (PLUG) & FuelCell (FCEL); solar like Array (ARRY), ReneSola (SOL) & SunRun (RUN); some random shit like Gevo, there's plenty of picks.

Just some ideas that I came up with on a quick note. And no, this is not financial advice.

Feb 5, 2021 - 1:35am

everybody thinks that way and that's why all main clean energy stocks sky-rocketed already. how much did ICLN rise for the last year? did the fundamentals of the companies in the index grow as much?

Feb 5, 2021 - 3:03am

The fundamentals went largely unchanged, but it is generally not easy to adjust fundamentals for the probability distributions of government contracts. I totally agree that everyone thinks this way - it is reflected in the market, but in my opinion, the stocks are not priced at levels where we think "This is a surefire thing". They are still priced with some likelihood of failure - DKNG and PENN have a total market cap of ~43b and hold a majority of the market when sports betting could have MONTHLY revenues into tens of billions. Also the institutional ownership of weed stocks is practically at zero still since they still don't look at it as a legitimate business - TCNNF has 0.16% institutional ownership, CURLF has 0.03% and CRLBF has 0.4% - if they go from OTC to normal listings, there is no telling what their price (and the corresponding profit margins) might become. Have you seen some of the shops that Trulieve runs in Florida? It's like a weed paradise, the equivalent of a kid in a candy store.

In my opinion if you are making long-term plays in the market, Biden isn't the most impactful player for weed or sports betting - the states themselves are.

Feb 6, 2021 - 12:43am

I agree with you 100%, the sector is overvalued because a lot of retail investors overestimate the impact of govt policy and future growth prospects.

It's also an industry that can become highly comoditized with barriers to entry that aren't THAT high. SEGD and ENPH aren't the next Exon and Shell.

Feb 4, 2021 - 4:16pm

Not scared. Automate it.

Money can purchase freedom, if you have the guts to buy it

  • 2
Feb 18, 2021 - 8:49pm


Not scared. Automate it.

bingo. it's fine to keep some dry pow pow but I stay fully invested nearly 100% of the time, have less stress than my peers and have pretty good returns (not like RenTech pre 2020, but better than SPY)

paging DickFuld I know you've got a thing or two to say on this

I'm a little late to this, I see.   As always, I'm all in on equities.  These people trying to dick around on whether they should invest or not are generally missing the forest for the trees.  Most people on this site and have time on their side.  Invest now and invest every time you can.   Always.   Thank me in 30 years.  

Feb 4, 2021 - 5:45pm

If you're nervous, diversify. The less you diversify, the less you have to lose and gain.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

  • 1
Feb 5, 2021 - 11:58pm

I have about 3% of my net worth in BTC that has been accumulated over the last year. Admittedly I know almost nothing about crypto so I'm purely speculating. But I'm skeptical that the recent price run up is just a repeat of the 2017 bubble and that I'll be able to buy it much cheaper in a few months to a year.

  • Intern in VC
Feb 6, 2021 - 2:23am

Nice! I probably have a lower net worth than you (only an intern) but have a significantly higher percentage in BTC. Crypto is here to stay. 

Feb 12, 2021 - 12:33pm

Just find a diversified portfolio you feel comfortable with (i.e., 60% stock, 30% bonds, 10% real estate, or whatever) and then invest in it on a periodic basis such as every month or something.

You'll catch some on the way up and some on the way down but over the long term you'll have a lot more money. No point in trying to time the market especially over longer time horizons. 

Feb 12, 2021 - 5:01pm

No because there are still many assets in the market that are under priced. You just have to know where to look. Just in the past few weeks I bought two names, one popped 50 percent and the other popped 30%. Not in sense that they are overvalued but the market is starting to appreciate their potential

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