Making Money Should You Still Invest if You Think the Market Will Crash?
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Nov 3, 2025 Toby Newbatt, a personal finance YouTuber known for his investing insights, joins the discussion on market bubbles and valuations. He dives into why fears of an AI or ‘everything’ bubble are emerging. Toby emphasizes the importance of long-term investing, despite market noise, and explains the Shiller CAPE and its limitations. The conversation also covers why diversifying investments is key, the risks in tech concentration, and how emotional pitfalls can affect trading decisions. Toby stresses that understanding personal risk tolerance is crucial in today's uncertain market.
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Prices Reflect Future Expectations
- Markets are pricing future hopes (like AI) today, so current highs reflect expected future cash flows.
- High prices mean companies must deliver exceptional future profits to justify valuations.
CAPE Shows Risk, Not Timetable
- The Shiller CAPE is near historic highs but isn't a perfect crash predictor.
- High CAPE correlates with lower expected returns, yet timing remains unreliable.
Start Investing Now Against Inflation
- If you are a long-term investor, start investing now because inflation erodes cash every minute.
- Stick with long-term plans; short-term market moves are irrelevant for long horizons.