Is the market gonna even crash anymore?

oof, lots to unpack here.

equities are disconnected from the economy - always been the case. the drivers of long term equity returns are valuation and earnings. there's rarely a point when long term returns are negative, but the times when they're greater than average have been when valuations and earnings are both rising, regardless of recessions. a great example is the 20-25y post WW2. you had a combination of rising earnings and rising valuations, even though there were 4 recessions in that timeframe. that set up for one of the worst decades economically and market wise (still positive returns, but far below average). equity markets in the US tend to lead the economic recovery, beginning their rise before the bad news is over as investors collectively look through to next year's earnings, anticipating recovery. whether this is in fact accurate or more like Soros believes, reflexivity where these investors actually help cause the recovery to keep going, that's unknowable. but the main point of thinking equities will crash because they're disconnected is a weak hypothesis, equities are always somewhat disconnected from the economy.

crash if biden wins - there has never, I repeat NEVER been a crash driven by a changing of POTUS, for the simple reason that POTUS doesn't matter all that much immediately. you saw how long it took Trump to get a retarded tax package passed with a majority rep house and senate. if the market crashes near the election, it'll be a combination of factors, maybe a move in sentiment, but not driven by any fundamentals. leave your politics at the ballot box, not your portfolio.

the question on whether or not the market will crash is the wrong one, because the answer is yes. but that "yes" isn't all that helpful. you can only profit from a carsh in the following ways - profiting directly via shorting/options hedges/buying assets that rise in a crash like long treasuries; waiting it out and levering up to buy at the bottom, or being in an industry that gets more business during a crash (like bread sellers during a hurricane). so forget the question "will the market crash" and start thinking about your action plan, otherwise you're just engaging in mental masturbation. let's see how this would work in reality

ok, so you think the market will crash? what market? how deep of a crash? when? if you think the market crash will be deep, widespread, and soon, you should bail out now and have a plan in place for getting back in (unless you want to be the whipping boy John Hussman or Gary Shilling, who both said stocks weren't cheap enough in March 2009).

also, what if you think the crash is only 10%? does that give you a big enough profit potential via shorting or backing up the truck at the bottom to warrant any action at all? 10% headaches happen often, just ride them out, no biggie long term.

finally, ask yourself what if you're wrong? what if the crash you're anticipating is weaker than you think, happens later, or isn't widespread and is only isolated in no earnings tech companies and not in the Dow stocks for example.

what you'll find as you ride out crises is that stock markets tend to climb the wall of worry, and while there are always reasons to be doubtful (after Q2's performance, I'm less optimistic), there is almost never a reason to get super defensive.

my acting thesis, along with what's in my portfolio are as follows - Q2 performance was a bit of an overreaction longer term, and all that did was pull forward the rest of 2020's returns early, rest of year will be boring af in markets. as it always does, unemployment will drift downward and spending will slowly recover but not across the board (covid will affect spending habits more than 9/11 did). winners will be companies that are underleveraged and have cash on hand. that will enable them to buy up competitors and distressed assets. winners will also be smaller companies that entered the crisis without a ton of overhead, will be good candidates to be bought or win market share. all of that said, you cannot ignore valuations. I'm not selling my stocks in here, but I'm not backing up the truck either. I firmly believe that even with historically low rates, valuations will drift downward. whether this is driven by changing index composition or just prices growing slower than earnings, I think you should lower your return expectations for the next 10y, even if you don't lower your stock exposure. I think the US economy does recover and is already on that path despite covid and will continue that path regardless of who wins in November (this is another truth, POTUS has never changed the direction of the economy due to an election), the recovery will take longer than some are anticipating, maybe 2024 before we're back to 2019 GDP levels.

in my folio - dividend growth is my thing for US large cap, and I farm out the work on mid and small cap (as well as international). have not stopped putting money in this whole time. while I'm not as invested in some of the high flying growth names, I own a couple of them so performance has been good this year, but not "I came into the year only buying AMZN, ZM, TSLA, and DOCU" good