71–80 of 81 posts
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No it isn't! It's better to buy and hold and ride it out. Otherwise you tend to miss the gains on the other side. Decades of research by now has shown that buy-and-hold beats timing the market every time.
That discounts the fact that companies stop existing during 'ride it out' decade.
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If you only invest what you can lose, it doesn't matter how long the market is irrational. Bitcoin is a high risk investment/volatile in the short term, but the question is what is it long term? You put your money in btc and they may crash 30% in a day. If you panic then you lose money.
Not sure what's with the downvote, but you are in essence right about going long. "Markets can remain irrational a lot longer than you and I can remain solvent." As for BTC, approach with caution, short or long.
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Interest rates likely to rise soon I keep hearing that, over and over, for years and years. Eventually it'll be true.
Well I'm just going on what the governor of the Bank of England says, but what do I know eh? 'In the clearest indication yet that there could be a rate rise as early as November, Mark Carney suggested that it was time for the bank to "ease its foot off the accelerator".' http://www.bbc.co.uk/news/business-41439349
http://www.telegraph.co.uk/business/2017/09/14/bank-england-...
Recommended reading. 1929 . Galbraith. http://www.worldcat.org/title/great-crash-1929/oclc/93339017...
I doubt it would help. So far I've seen four posts that are spot on, downvoted. The general sentiment is towards hype and bubble, and it's just another echo chamber reinforcing the spiral. Not just here, and a lot more pronounced lately.
Oh, and Galbraith covers that in his short, very readable, book.
My projection is that this is resulting from a lot of circular investing. Fund A gives money to company B, who has more money than they can spend so it goes to fund C, and then that goes to company D, etc. We've learned that you are not supposed to have idle capital. And yet we keep so much of our wealth as money, the only way to deploy it is to send it in a circle. Valuations go up, prices and costs don't. Unfortuna…
That end is called raising the interest rate. When the rate hits some magic phase transition number where enough people believe you can invest in safe liquid accounts for more than the return on risky assets then the whole thing collapses. But then it'll get propped up again afterwards and everybody believes that now.
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I agree stocks are rich/richish by most metrics, but still cheaper than bonds/real estate. And the latter have very strong negative correlation to the level of interest rates. Plus, private equity is sitting on close to $1T of dry powder. That's a pretty strong back stop to stock prices. In short, to avoid the crash you need to figure out what causes mass PE withdrawal, and get in front of that. https://www.bloomberg…
"I agree stocks are rich/richish by most metrics, but still cheaper than bonds/real estate. And the latter have very strong negative correlation to the level of interest rates." Bond prices go down. Yields go up.
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"I agree stocks are rich/richish by most metrics, but still cheaper than bonds/real estate. And the latter have very strong negative correlation to the level of interest rates." Bond prices go down. Yields go up.
Yield spreads are at extremely rich levels. happy now?
Interesting to note that dollar adjusted the market has actually been going down for months. http://ei.marketwatch.com/Multimedia/2017/10/04/Photos/NS/MW...
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The real value is the nominal value adjusted for the rate of inflation (using an agreed definition of inflation and against some agreed monetary base - see M0, M1... and other types of monies) Inflation means the purchasing power of the unit of currency is reduced. iirc it was Keynes who noted that government financing can utilise the margin between real and nominal values, with the benefit of also maintaining animal…
I also read the Amerman article now. His analysis completely forgets one very important thing: stock dividends, which are also higher during periods of high inflation, and compound if you reinvest them. I didn't run the math, but that would for sure change the results a lot. http://www.multpl.com/s-p-500-dividend-yield/table