why even vanguard says it’s time to look beyond the stock market

Why Even Vanguard Says It’s Time to Look Beyond the Stock Market

There are a lot of smart people in the investing world. People who know more, see more, and do more than I do here in our Tri-Cities-focused portfolio. But sometimes you must stop trying to be clever and just repeat the facts.  

I was sent the email below from Patrick Grimes (I am certain he did not send it to me personally). But he says so perfectly what I have been seeing in the market, and he has the facts to back it up.  

So no copyright infringement intended. Read on…….. 

1. State of Stocks and What To Do

According to Fortune, even Vanguard’s investment chief is now telling investors to pivot away from U.S. stocks.

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Over the past 10 years, U.S. stocks returned 12.4% annually on average. 

According to USA Today, Vanguard now expects just 3.3%–5.3% per year for the next decade. 

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Here’s what’s driving this dramatic shift — and what it means for your portfolio:

Stocks are historically expensive 

  • The S&P 500 is now trading at more than double its long-term average valuation 

  • One key measure is the CAPE ratio (Cyclically Adjusted Price-to-Earnings), which compares stock prices to company earnings over the past 10 years — it smooths out short-term noise 

  • Today, the CAPE is near 39 — historically, anything above 30 has signaled an overheated market 

  • Similar levels preceded major downturns like the 1929 crash and the dot-com bust in 2000 

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Your portfolio may not be as diversified as you think

  • Just 7 stocks (Apple, Amazon, Nvidia, etc.) now make up 34% of the S&P 500 

  • If even one falters, it could ripple across the market 

Corporate earnings aren’t keeping up

  • S&P 500 earnings grew only 9.6% in over 3 years — slower than inflation 

  • Yet many stocks are priced as if future growth will be explosive 

Index funds are no longer a safe haven

  • The “diversification” they promise is eroding as top-heavy stocks dominate returns
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Even traditional strategies are getting rethought

  • Vanguard now suggests flipping the classic 60/40 portfolio to 60% bonds, 40% stocks 

  • Why? Because stock-heavy portfolios are overexposed at exactly the wrong time

What Smart Investors Are Doing Instead

  • Rebalancing away from overpriced U.S. equities 

  • Exploring income-generating assets with low correlation to Wall Street

  • Focusing on stability, consistency, and tax efficiency — not speculation 

All these warnings about the stock market have me super happy that I do not have any assets in the S&P. But I worry about what this means for the average family and the safety or their wealth. If you want to learn more about how alternative assets (real estate, oil & gas, marinas, secured notes etc.) can help you protect and grow your savings or retirement, hit reply and let me know what has you concerned. I will provide you with resources and tips tailored to your situation.

“Fortune favors the prepared mind”  Louis Pasteur

PS: I feel Patrick is a great resource. If you agree: join his community at https://passiveinvestingmastery.com/ 

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