This implies that the stock market is little more than a lottery governed by the whims of the "elite". It goes up because people think it will and vice versa....
No thats way too simplistic and thats why we have 10000000000 bears watching in horror as the market keeps on going up.
There is a lot in what he is saying there. It has little to do with your assertion.
However investment and or growth that is engineered just for the sake of it will bear consequences.
On the contrary, stock prices are meant to be an indicator of company health and by proxy the market is an indicator of economic health. If the two are diverging than then there is possibly something wrong.
Perhaps my choice of words were a bit exaggerated but I don't think I ever said that this divergence is not possible but what does it say for the markets and the economy when it does happen? Is it just the cheap money forming another bubble to be burst further down the line?
The market is plain as day a bull market
not while everyone is worrying about the future.
perhaps, perhaps not... maby the gap will close with the real economy catching up as the market stagnates, or the market drops to meet the reality or perception of the economy...
what im trying to say is that you cant necessarily argue the market is going down cos the economy is effed... and arguing on economics in a market thread when there is an obvious divergence doesnt make sense...
The market is plain as day a bull market, if the economic fundamentals arent there then it can be chalked up to printing press, flight for yield, game theory, "animal spirits" or whatever the soup dujour
imo i forecast stocks to go much higher when US budget solvency/inflation is at hand... all that cash rolling over in short term treasuries will flood to property,shares when this happens (Im assuming), so bad economy but market up more.. Until the market diverts from this trend and other things come to light you have to go with it or sit on the sidelines as an ego trip so you can say in 5 years 'see I was right', whilst everyones made triple digit returns
Agreed. The stocks are going up for now. If your trading, time to make money.
All the ordinary blokes with money in stocks in super get smoked in the process.
People often confuse the members on this forum with 'everyone'.
Talking to everyday people they either
A - Don't know what's going on.
B - Don't care what's going on.
C - think that this rally is sustainable, and is somehow warranted.
D - Think that the global economy is just rosie, and that it's just a few minor headwinds up ahead, nothing we haven't dealt with before....
or E - are concerned as to what is on the horizon. Which in my experience is a very very small minority.
Yes at any given point in time you can have a market going up and a economy in bad shape. The point is whether this will last? This is the argument between long term investing and trading (see tech/a's earlier comment). All the ordinary blokes with money in stocks in super get smoked in the process.
To me it means
The ordinary guy with SMSF is reactionary to immediate news and will be too slow in a crash situation.
OR
The ordinary guy in a superfund will just get smacked as the superfund holds for the long term.
Point is they arent capable or in the position to control their own risk.
Exactly. Not everyone has a SMSF. For the majority,investing in the stock market is via super or long term holdings and in many cases they might be misinformed about the risks associated with their investments. Or what if you happen to retire during the crisis?
A - Don't know what's going on.
B - Don't care what's going on.
C - think that this rally is sustainable, and is somehow warranted.
D - Think that the global economy is just rosie, and that it's just a few minor headwinds up ahead, nothing we haven't dealt with before....
A real and present danger.
The only thing I have been able to come up with as a safeguard is passive income from various sources.
(1) Business---not everyone has access to a business that will continue with minimum to no input during retirement. But perhaps (If your capable) some surplus income could go here.
(2) Property for rents on freehold--majority Industrial sheds.
(3) Shares provided they remain above purchase price--IE little or no erosion of initial capital.
(4) Short term discretionary trading---I use the FTSE pretty easy to supplement an income from just this ---many other instruments you could become proficient at---but you MUST be able to go long and short.
Not expensive to trade a few contracts.
(5) Be debt free
This is my setup for semi then full retirement.
All will change if the crash we have to have belts us---still would rather be here than
THERE!
I don't understand where the bit I put in bold is coming from? Does that mean its not fair cuz the market doesn't make sense and send out screaming "its ok to buy and hold for the next 2 years" signals.
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