71–80 of 117 posts
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Please show on the S&P 500 graph where buying to sell now hasn’t been a great opportunity in the last 100 years minus the last twelve months.
this fairytale may help you sleep at night. But 100 years is almost no history at all, i hope you can appreciate that.
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Infinite growth forever is a truism that isn't very useful. Growth can continue indefinitely, but we will hit limiting factors relating to how we structured our economy.
Growth should approximate population growth over time. It doesn’t have to match it step for step every single year. It bothers me that the central banks use inflation targets as an excuse to not raise rates - inflation is lumpy and not linear, as we see today. They should have raised rates much earlier and allowed for zero inflation, so that today we wouldn’t be in such a precarious situation needing dramatic rate in…
Oh, this is just the beginning. Ten years of “oh, just buy index funds” strategy will unwind with a huge snap.
‘09 college grad here…can the economy just level out and be stable for folks for a while in my lifetime? Guess not
I actually feel really prepared for this one. 2007 made me nervous, but not this one. I feel secure in my employment and I finally have a real emergency fund even if I lose my job. I'm not optimistic about long term though. The infinite growth delusion seems like it will break in my lifetime, retirement is scary
Too young to understand what happened in the 2008 GFC but I doubt the 'feeling prepared' part works like this. First of all, the recessions tend to last longer than most people expect/plan for. Statistically, it will turn out their 'secure' jobs will be less 'secure' than expected. Meanwhile their emergency funds will start shrinking (slowly at first, then all at once) due to loss of purchasing power & eventual job l…
Predicting the future is always challenging. But preparing for a range of unknown outcomes is often doable.
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From what I can understand (which I will freely admit is somewhat limited, and biased), it seems to me that the root of the problem is that we let the very wealthy soak up all the economic gains due to productivity over the course of a few decades, while also letting those with more money have more influence over our politics (thus meaning that they had the means to ensure their gains would be locked in, rather than…
The logical extrapolation from what you are saying is command economy / forced mass redistribution to wealth. It's a great exercise to research the effects of this type thing historically.
The federal reserve has kept interest rates artificially low for the past few decades, to sell broken unpopular policies to the public (eg Iraq war), to enrich the financial industry, and to simulate growth.
The vibrance of capitalism relies on capital being distributed, so that it competes rather than acting uniformly. By flooding the market with newly created capital from a central source, the federal reserve has completely undermined capitalism and substituted it with the politics of who gets newly created money. One of the biggest recipients of new money has been the financial industry, which has even been whitewashed as some kind of neutral actor but is anything but. This is why more and more of people's every day lives have been financialized - made legible to the financial system and parceled out into monthly payments.
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They are downplaying this whole thing heading into the midterm elections. Inflation is transitory, it's the supply chain, it's Putin, it's gas station owners and oil companies, we're doing a soft landing. These are all cover stories for doing nothing. Low interest rates + $5T in bond purchases fueled remarkable growth and all time high employment. Raising interest rates and selling those bonds will do the opposite. T…
From what I can understand (which I will freely admit is somewhat limited, and biased), it seems to me that the root of the problem is that we let the very wealthy soak up all the economic gains due to productivity over the course of a few decades, while also letting those with more money have more influence over our politics (thus meaning that they had the means to ensure their gains would be locked in, rather than…
Not that I like it, but my understanding is the exact opposite.
Inflation is going up because workers are finally getting some of the economic gains. The wealthy can gain tremendous amounts of money on paper, but it doesn't impact inflation because they aren't spending it. For example, a trillionaire isn't buying a trillion dollars worth of of steak.
However, minor employment Improvement and salary means that there are tens of Millions of more people competing to buy steak in the supermarket, hence price inflation
We enjoyed 12+ years of cheap capital. Our stock market were largely bubble of tech companies that used this cheap capital to achieve insane market cap. Those days are over and will not come back for a loooong time. ex) Japan has not reached its 1989 peak and its nearly going into 40 years no sign of stopping. Globalization is also come to an end and our economy built around cheap capital and Chinese labor is over. T…
Honestly I don't think the issue is that another recession is coming. It's going to be the fourth or fifth serious economic crisis I've experienced in my lifetime. What worries me is that the quality of our political leadership and in general our ability to diagnose and address complex issues is, in my view, at an all-time low.
They are downplaying this whole thing heading into the midterm elections. Inflation is transitory, it's the supply chain, it's Putin, it's gas station owners and oil companies, we're doing a soft landing. These are all cover stories for doing nothing. Low interest rates + $5T in bond purchases fueled remarkable growth and all time high employment. Raising interest rates and selling those bonds will do the opposite. T…
The market generally factors in a lot of things, it's not looking at 1.5% rates, it's looking at what the fed has effectively committed itself to doing. It's looking at 3% rates by the end of the year.
Honestly I don't think the issue is that another recession is coming. It's going to be the fourth or fifth serious economic crisis I've experienced in my lifetime. What worries me is that the quality of our political leadership and in general our ability to diagnose and address complex issues is, in my view, at an all-time low.
Same result either way though.
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The passive vs active investor numbers I see tend to put them roughly equal or passive investors being more. Not sure exactly how index funds and passive investments are different, but since vanguard are selling index funds they probably define it as strictly as possible to make it look like it is a smaller part of the market.
That may be the case, doing a bit of research here I see some numbers where if you slice only the America market passive investors are near parity of even a minor majority - but the question still remains, has that fundamentally changed the market composition? I wonder if it'll make it more stable because the passive investors aren't as inclined to randomly shift money around or pull it out. Even if they are inclined…
So, yes, passive investing helps stabilize the entire market to trade in tandem, but too much is a danger to the health & stability of our market and economy as it enables misallocation of capital.