The chance of a substantial correction (>10%) in the first half is likely because of overvaluation and excessive optimistic sentiment. The question is, do you increase your positions afterward or become defensive ahead of the probable event?
Advisor Perspectives (advisorperspectives.com)
Investors believe that the economic recovery, combined with loose monetary policy will perpetuate the bull market. Consequently, investor optimism for equities is well above average.
American Association of Individual Investors (aaii.com)
The number of initial public offerings is surging, with many being priced at substantial premiums.
Margin debt reached a record in November.
Yardeni Research (yardeni.com)
The recovery from this correction could be particularly strong, however, and the S&P 500 is likely to be 15% higher before the end of 2021.