I am thinking that the US market has a significant probablity of a >10% decline in 2026.
I saw the first two charts at https://www.theirrelevantinvestor.com/p/the-compound-and-friends-the-case-for-a-year-end-melt-up
The charts showed that 2025 is a continuation of 2023-24 and eerily similar to1969, 1972, 1998-99 where a large correction occurred thereafter.
Alpha Architect has a post on the current high valuations (based on CAPE ratio) in US market suggest negative real returns for the next 10 years. This suggest that the US market will go down sometime in future but we just don't know when.
When US market goes down, HK and SG markets may also go down to some extent.
As such, I will adopt a more prudent stance and increase my cash level slightly moving forward. This will reduce my returns from equity but it will also reduce the losses from market correction if it happens.
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