Since Inauguration Day!

Teflon Don said:
So then the Biden/Obama gains should be really adjusted for inflation and may not be real gains at all? Is that what you are saying?
Click to expand...
The Obama gains were in a borderline deflationary economy, but the Biden gains did have the tail winds of inflation. A quick back of the envelop calculation shows about 40% of the gains could be explained with inflation.

There is a secondary effect with inflation of people trying to save money from inflation by investing in stocks. This only happens if people think the inflation is long term. If they think it is shorter term, they take money out of stocks, and use it to lock in long term high interest rates in bonds. As I remember things, people were trying to lock in interest rates with bonds during the Biden Administration, so it is probably a little lower than 40%.

I believe the stagflation of trump will be seen as more permanent, so we can attribute more of the market rising to inflation. But you invest how you want.
 
Hawkeye10 said:
Almost no one has any idea what this economic crash will be like.
Click to expand...
You might be right. trump is doing unprecedented things, and then reacting in unprecedented ways. The closest comparison is third world dictators, but can we really compare the effects on a third world country to the effects on a first world superpower economy?

I guess the S&P 500 will go down to 5,000, and then stop. It might go down much further.
 
Teflon Don said:
So you don’t believe in Warren Buffets adage of buying when others are fearful? Buy on the dips? Dollar cost averaging?
Click to expand...
We are in a bear market (trending down) so buying on a dip really no longer applies. Worse yet, each dip could be the beginning of a crash. Timing the bottom of the crash is difficult, so you could buy when it dropped 1%, and was about to fall another 49%.

Buffet is more about holding onto your investments for the next couple of years hoping the market bounces back. This is why people generally recommend that you do not invest in the stock market if you need much of your money in the next five years. Teens will sometimes put their earnings in the stock market for a year or two before going to college, only to find their money halved by a crash right before they have to start college. They would have been better off buying a CD.

Dollar averaging makes a lot of sense right now, and in general makes sense. It evens things out, means you buy more in the bad times, then it the good times, so only costs you a little on average, but makes a huge difference in preventing huge losses. Usually they say, "it is not timing the market, it is time in the market" (meaning put the money in as early as possible, but dollar cost averaging is the exception.

If you get a large payment, an inheritance from Aunt Zelda, or whatever, put it in a money market account, or short term bond mutual fund. Then for the next year, every week, take one fifth of it and invest it in the stock market, preferably a passive, broad blend mutual fund. You probably also want to put 10% into a bond mutual fund. I go for Treasury Bond and equivalents, but even I am beginning to question whether the US Government is more stable than private bonds.
 
Earl said:
Indeed, Rarely Right Walter makes these predictions and is rarely right...hence the name.

The DOW was up nearly 700 points Friday.
Click to expand...
If you think I am wrong, and that Friday is part of a greater trend, you should definitely invest in that. An aggressive investment, if successful, would payoff either to one. You could make a lot of money, very quickly.

I might be wrong. The S&P might go to 6,000 again. On Friday, it rose 117.42, from 5,521.52 to 5,638.94. Three more days like that, and it is at 6,000.

I do not think I am wrong... at least not in that way. I am seeing a real chance that the S&P 500 will crash well below 5,000. I am not willing to speculate with money, yet, on anything below 5,000... But I may well really regret that in a few months.
 
Walt said:
The Obama gains were in a borderline deflationary economy, but the Biden gains did have the tail winds of inflation. A quick back of the envelop calculation shows about 40% of the gains could be explained with inflation.

There is a secondary effect with inflation of people trying to save money from inflation by investing in stocks. This only happens if people think the inflation is long term. If they think it is shorter term, they take money out of stocks, and use it to lock in long term high interest rates in bonds. As I remember things, people were trying to lock in interest rates with bonds during the Biden Administration, so it is probably a little lower than 40%.

I believe the stagflation of trump will be seen as more permanent, so we can attribute more of the market rising to inflation. But you invest how you want.
Click to expand...
Personally I am looking forward to a recession. Assets have been overvalued for some time and have some capital I would like to put to work. Everyone knows you make your money when you buy not sell
 
the-brightest-economic-future-the-world-has-ever-seen-v0-r1tbcuw8wwoe1.jpeg
 
Teflon Don said:
Personally I am looking forward to a recession. Assets have been overvalued for some time and have some capital I would like to put to work. Everyone knows you make your money when you buy not sell
Click to expand...
That would mean you are looking forward to a crash, not a recession. The two are often related, but are not the same.
 
Walt said:
Stock prices are one of the most public things possible. I don't think they are a lie.
Click to expand...

Kewl, so Obama and Biden had higher DOW and S&P that Trump does...

I see your point - 41,488.19 is WAY lower than 33.976.24

You Stalinists are just as smart as you are honest...
 
You must log in or register to reply here.
Back
Top