Why is the stock market rallying when the economy is so bad?

Post by mirimir » Mon, May 11, 2020, 1:18 AM UTC

JKCalhoun wrote: post #128

bb2018 wrote: post #13

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I agree. Also, I know it is hip to say that Wall Street is short-sighted, but in reality it is one of the the few fields where people routinely think decades at a time. If you run a large pension fund or investment account you were already risk-weighted and if the cash isn't needed for 10+ years you'd much rather own a slice of the world's largest companies ten years from now instead of gold or cash under a mattress.

I feel like there is a decade of guillotines in the future that they are either not seeing or are looking way past. But then I've always been cynical about the growing divide between the uber-wealthy and the other 99% of this country.

Post by [deleted] » Mon, May 11, 2020, 1:23 AM UTC

scarmig wrote: post #494

Consultant32452 wrote: post #349

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It's also interesting how the scale has slid up so much that many people now believe the "American Dream" is to become a millionaire/billionaire. When originally it was merely the idea that if you do the right thing your children will be better off than you were. It wasn't until the gold rush in the 1850s that the American Dream, for some, became this idea of get rich quick scheming. I can't speak to everyone, but my…

Thankfully pretty much everybody still has the ability to buy into a safe neighborhood with a good school district in the Bay Area.

Post by closeparen » Mon, May 11, 2020, 1:25 AM UTC

wodenokoto wrote: post #333

closeparen wrote: post #276

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>average Americans (the 90%) In what sense is 90% average?

You have 100 items, 5 are zero, 5 are 100 and the rest are 50. Your average is 50, and 90% of your items are average. These are your average items (the 90%) In this case, though, average is meant in its colloquial form of another way of saying "normal".

Post by freediver » Mon, May 11, 2020, 1:28 AM UTC

karatestomp wrote: post #330

closeparen wrote: post #270

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Because the priority order is: a) Consumption spending b) Real estate c) Stocks When middle class people hit diminishing returns on electronics and vacations, they upgrade their houses. Appetite for remodeled kitchens and bigger, nicer, better-located houses is voracious, so relatively few people satisfy it and fall through to stocks. Making sacrifices on housing in favor of your stock portfolio is of course possible…

The biggest tax advantages for investing go to the rich, who can arrange their businesses and finances to max out retirement accounts, and very highly paid professional with fat 401k matches. No matter how someone with a normal salary and a 2% match tries they cannot get anywhere near maxing out a 401k, due to how they’re structured (over 50% of the max can only come from an employer, and the employee can’t make that…

Post by icedchai » Mon, May 11, 2020, 1:32 AM UTC

peterangular wrote: post #530

icedchai wrote: post #509

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What does self made mean to you? I read that book when I was in my early 20's. I followed all of its advice, which basically comes down to "live below your means, save, and invest." The truth is I was already following it anyway. My parents lived below their means, and my dad taught me about investing when I was a teenager. Every generation has recessions to deal with. By the time I was in my mid 30's, I was, indeed,…

"Self made" is an over-simplification of a complicated process... one which you impressively admit you've achieved. Which, 100% - that is amazing, and you should be proud of your accomplishments. My definition of "self made" is not important, my point is that everyone's definition is going to be different. Here's the thing - I have no idea who you are, what your history is, and I can't make a single comment on the va…