It's not wise to do so unless you will need the money in <10 years. The market is not meaningfully overvalued in terms of the ERP - and rates are only headed lower barring a sudden breakout in the CPI. So while volatility, selloffs etc. are certainly possible, it's not likely that the market will tank lower and stay at those lower levels forever. If SPX did drop 30% you'd be getting a 6% earnings yield, very attractive with bonds and cash at zero. With a long term view you should be hoping for a crash, since your contribs and reinvested dividends will be yielding so much more. Another good long-term option is to diversify to international equities which might be more favorably valued, especially as the USD is quite strong - however historically these have sold off right along with the U.S. when we've hit a major bear. If you will be needing the money fairly soon then you could take some risk off the table, and invest in blue chip rental real estate (even if discount rates rise tanking the property's value, your rental income will stay the same so long as the local economy holds up, the neighborhood stays good, etc), or just raise your cash balance - IB is paying 108bps on cash now which compares quite favorably with <150bps on 10 year bonds.
RedDuke, I want to be a millionaire in 20 (hopefully less) years. My black ass HAVE NO choice on earth but to buy the S&P 500 index every two weeks when I get paid. I max 401K to government limits every year and I buy in another account as well. Where I work at, about 4 people not even 60 years old yet are retiring from work early because of the 30% returns the index provided in 2019. I would be a damn fool not to invest in S&P 500 index if it drops to 60-80 percent. And I get dividends 4 times a year. Easy money. Ridiculously easy money.
very good goal, and the History is on your side. That being said, Japan is still below all time high made over 30 years ago. What happened last 10 years is something we have never seen before, the ramifications will be known next decade.
The earnings yield is simply the annual dividend payout per share divided by the price of the asset. If SPY were trading at $100 and the dividend was $3/share annually that would be 3%. If SPY fell to $50 that $3/share would be 6%.
To juice your returns you want to increase your contributions the further equity indexes move away from all time highs. For instance, contribute 5% regardless, if the market drops 15% bump it to 10%, and if it drops 30% bump it to 20%. You want to be invested in at least 80-90% equities for the long haul. Roughly 50-60% US equities and the rest global. You want to be 30%-40% of that in large cap stocks and the remainder in mid or small caps. For the remaining 10-20% not in equities there are REITs, commodities, and alternative investments such as hedge funds