So here's the question: Can we invest in the S&P 500 and Nasdaq now?

1/ First, the conclusion: Yes, but don't go all in. You can buy now, but it's not like three years ago where you could just buy blindly. High valuation is a fact, but high valuation doesn't mean doomsday; it just means future returns will be compressed.

2/ The S&P 500's Buffett Indicator is at 236%, the Shiller CAPE is 41x, and Berkshire Hathaway has been net selling for 13 consecutive quarters, with cash reserves hitting an all-time high.

All these data points are saying the same thing: It's not cheap right now.

3/ But cheap and good investment are two different things. In 2000, the CAPE was 44x, and the S&P 500's annualized return over the following decade was indeed negative. However, when the CAPE was 25x in 1996, people also cried that it was expensive, yet the S&P 500 rose 80% in the next three years. Those waiting for a crash often end up missing out instead of finding an opportunity.

4/ What does high valuation mean? It means the annualized return over the next 10 years will likely drop from 10% to 2%-5%, or even lower. But it doesn't necessarily mean a crash. The market can oscillate at high levels for many years, digesting valuations through time rather than through a collapse.

5/ So whether you "should buy" depends on your holding period. If you plan to hold for three years, the risk-reward ratio is indeed poor right now. If you plan to hold for twenty years, current valuations are just noise at the start.

6/ Historical data is clear: Buying the S&P 500 at any time and holding for 20 years yields a median annualized return still above 7%. Even buying at the peak in 2000, you would have doubled your money by 2020. What you should fear isn't buying at a high point, but having no position at all.

7/ But risks cannot be ignored. CPI exceeding expectations again, the Fed raising rates again, AI commercialization falling short, consumption recession, geopolitical escalation—any of these could cause the S&P 500 to drop 20%, 30%, or 40%.

The question is, which of these can you predict? If you can't predict them, your strategy shouldn't be built on "waiting for a big crash."

8/ The biggest problem with waiting for a crash isn't that you won't see one, but that when it happens, you won't dare to buy. In March 2020, so many people were shouting about waiting for a crash, but when it finally happened, they sold in panic. That's human nature; don't overestimate yourself.

9/ So what to do? If you have positions, keep holding, but don't add aggressively. Especially if your Nasdaq exposure is too heavy, consider moving some to the S&P 500, dividend ETFs, or short-term bonds to reduce portfolio volatility. This isn't bearishness; it's rebalancing.

10/ If you have no positions, don't go all in, and don't stay empty. Dollar-cost averaging (DCA) is the least sexy but most correct strategy. Spread it over 10 to 15 months, buying a fixed amount of the S&P 500 and Nasdaq 100 each month. Buy more when it drops, less when it rises. After all, you're investing for twenty years, not twenty days.

11/ As for the Nasdaq, be a bit more cautious. The tech industry favors winners-take-all, but the winners keep changing. Ten years ago, the top ten in the Nasdaq included Intel, Cisco, and Qualcomm, none of which remain today. If you bet on NVIDIA, Microsoft, and Tesla today, in twenty years it might be another batch entirely. The benefit of the Nasdaq 100 is its automatic turnover; the downside is its much higher volatility compared to the S&P 500.

12/ So my personal allocation idea: 60% core position in the S&P 500, 20% in Nasdaq 100, and 20% in cash or short-term bonds. Cash isn't for waiting for a crash; it's for waiting for opportunities. When real opportunities arise, you need to have the money to pick up the chips.