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re: what's supporting the market?
Posted on 4/8/11 at 4:17 pm to Nyala
Posted on 4/8/11 at 4:17 pm to Nyala
quote:
thanks for the response. i agree and am sticking with the market long term. the advice you gave is identical to that given to me years ago by my aunt, a financial advisor. and no, she isnt making money off of me for those who were wondering...
What makes you think the stock market is a good long term investment? Seems like stocks are a bit overpriced to me.
2
Posted on 4/8/11 at 5:30 pm to OohPooPahDoo
nothing technical. simply alot of advice from folks who are as educated on the subject as anyone.
Posted on 4/8/11 at 5:54 pm to OohPooPahDoo
quote:
If I could use past economic data to predict that S&P index would rise by X percent over the next year
Who is trying to predict where the market will be a year from now? You merely asked if the market will be higher or lower in 30 years than it is today. The answer is that it will be higher, and all information and evidence available says that without much of a doubt, it will be.
Posted on 4/8/11 at 6:02 pm to Nyala
quote:
nothing technical. simply alot of advice from folks who are as educated on the subject as anyone.
How does being educated enable one to predict the future 30 years in advance?
Posted on 4/8/11 at 6:05 pm to JPLSU1981
quote:
Who is trying to predict where the market will be a year from now? You merely asked if the market will be higher or lower in 30 years than it is today. The answer is that it will be higher, and all information and evidence available says that without much of a doubt, it will be.
All the information and evidence says it will be at a price equal to risk free return minus dividends paid out. If the information pointed to it being above or below that, the price would automatically adjust accordingly.
U can't just assume the market will beat that 30 years from now without explaining why their should be an equity premium.
This post was edited on 4/8/11 at 6:08 pm
Posted on 4/8/11 at 6:07 pm to OohPooPahDoo
quote:
What makes you think the stock market is a good long term investment?
Are you trying to say that the stock market, generally speaking, is not a good long term investment?
You are aware that the S&P 500, since inception in 1926, has posted over 60 positive years and a mere 24 negative years, right? It is certainly accurate than an individual securitiy's past performance is not indicative of future performance, but when looking at the economy as a whole it is fairly easy to predict long-term growth when all economic inputs are factored in (and hence you would have growth in the market as a whole).
Posted on 4/8/11 at 6:10 pm to JPLSU1981
quote:OK. Well its a bit too late to invest in the past I think.
You are aware that the S&P 500, since inception in 1926, has posted over 60 positive years and a mere 24 negative years, right?
quote:
It is certainly accurate than an individual securitiy's past performance is not indicative of future performance, but when looking at the economy as a whole it is fairly easy to predict long-term growth when all economic inputs are factored in
How would you know how easy it is? You can't test your assertion for another 30 years or so.
Posted on 4/8/11 at 6:15 pm to OohPooPahDoo
The market will be higher in 30 years than it is today.
quote:
How would you know how easy it is? You can't test your assertion for another 30 years or so.
There's no reason to "test" anything. I have my money where my mouth is ... invested primarily in the stock market, where most prudent/logical people have the bulk of their long-term retirement savings.
This post was edited on 4/8/11 at 6:27 pm
Posted on 4/8/11 at 6:50 pm to OohPooPahDoo
quote:
will be at a price equal to risk free return minus dividends paid out.
you have mixed risk premium and return on equity. risk premium is expected return minus the risk free rate generally considered the 2yr treasury.
return on equity is the sum of dividend yield and capital gains.
risk premium or equity premium is virtually unknown and therefore inherent in either the equity or fixed income market at any given time. consider QE1 and QE2 - there is a risk premium in the equity market due to the fact that the Fed is forcing you into equities by not yilding anything on risk free rates and cash. how much? that's up to you to decide, but it certainly exists.
the market will absolutely be higher in 30 yrs. find a better performing asset over the long term that provides appreciation and income, as well as fights inflation. can't do it.
Posted on 4/8/11 at 7:43 pm to Nyala
What is supporting the market?
Confidence?
Stupidity?
Lambs/ Sharks?
Common Retailer/ Institutions/ Goverment?
The market is like the fricking matrix dude. You can believe who or what you want and justify the reasoning for your actions. At the end of the day we are playing the casino except our odds might be better in Vegas.
My opinion is that I trust my own DD and not some 401k because institutions such ad GS have money hedged both ways. How many 401 ks were built to the short side
before the subprime crisis? I side on the cautious side even when analyst are talking about the substantial gains during the past guburment shutdowns. I missed on some nice gains today by pulling out but that was me pulling off the table whena new dealer is called to the blackjack table after the tables been winning.
Anyway, I am hammered drunk so don't mind me?
Confidence?
Stupidity?
Lambs/ Sharks?
Common Retailer/ Institutions/ Goverment?
The market is like the fricking matrix dude. You can believe who or what you want and justify the reasoning for your actions. At the end of the day we are playing the casino except our odds might be better in Vegas.
My opinion is that I trust my own DD and not some 401k because institutions such ad GS have money hedged both ways. How many 401 ks were built to the short side
before the subprime crisis? I side on the cautious side even when analyst are talking about the substantial gains during the past guburment shutdowns. I missed on some nice gains today by pulling out but that was me pulling off the table whena new dealer is called to the blackjack table after the tables been winning.
Anyway, I am hammered drunk so don't mind me?
Posted on 4/8/11 at 8:02 pm to Interception
I am a doomer, but I don't know which way it goes in terms of hyperinflation or deflation. I think QE2 will end and markets/PMs will tank, then QE3 is introduced and it's cotton candy, ponies, and $150 oil/$1,800 gold/$75 silver for everyone.
All of that said, anyone who thinks there will be a Dow/S&P in 30 years is out of his mind. Industrial civilization runs on energy (duh). Oil is at its historical production peak, give or take a few years. Ain't gonna be any in 30, or natty gas for that matter. Best case scenario is we have coal and nukes keeping the lights on, but nothing will be moving goods around the planet the way they are now. Dr. Bartlett said so.
LINK
Heinberg is good, too.
LINK
This post was edited on 4/8/11 at 8:10 pm
Posted on 4/8/11 at 8:04 pm to JPLSU1981
quote:
There's no reason to "test" anything. I have my money where my mouth is ... invested primarily in the stock market, where most prudent/logical people have the bulk of their long-term retirement savings.
OK. But how do you know it will be higher in 30 years though? Just because people who you think are smart are doing it?
Posted on 4/8/11 at 8:06 pm to The ATL
quote:You mean in the future or the past? I'm not interested in investing in past returns, figuring out how to build a time machine is prohibitive.
find a better performing asset over the long term that provides appreciation and income, as well as fights inflation. can't do it.
Posted on 4/8/11 at 8:46 pm to JPLSU1981
Is the Japan Market (Nikkei) higher now versus 30 years ago? Will it be higher in 10 years than it is now? What Japanese monetary policy will cause their market to be higher?
The Fed is detroying the dollar. Politicians are spending more than they can tax. If they raise taxes the market should go down. If they cut spending the market should go down. All of this assumes no more QE.
During the Great Depression it took the market 25 years to get even.
How long will it take the NASDAQ to get back even with its highs.
The Fed is detroying the dollar. Politicians are spending more than they can tax. If they raise taxes the market should go down. If they cut spending the market should go down. All of this assumes no more QE.
During the Great Depression it took the market 25 years to get even.
How long will it take the NASDAQ to get back even with its highs.
Posted on 4/8/11 at 9:35 pm to djmicrobe
Good shite, DJ.
Posted on 4/8/11 at 9:37 pm to Nyala
more buyers than sellers!
Posted on 4/8/11 at 10:35 pm to Interception
quote:
t the end of the day we are playing the casino except our odds might be better in Vegas.
lolwut
I'd like to go to a casino that historically returns 9-10% a year on my investment.
Posted on 4/8/11 at 10:37 pm to Bunk Moreland
quote:
Ain't gonna be any in 30, or natty gas for that matter.
Posted on 4/9/11 at 12:19 am to rollthatback
OMG, most of Americans 401k's have been slashed in half and we are pulling out academic jargon? I am not disagreeing on historic data but instead on the modern day instruments people are using to reach this 9-10% "historical" ROI percentage. Take a step back and realize there are gains to possibly be made to the short side instead of the constant buy, buy, buy cries the so called "analyst" always recommend. How often does a financial advisor at a bank play the market to the short side is my point? It's always the market will trend up because of long term statistical data. Where was the caution of these experts leading up to the subprime lending crisis? Answer, it was non existent which tells any reasonable person that alot of these financial advisors have no idea what they are selling you because they are merely lackeys to sell a certain instrument. The market is so complex especially considering high intel computers working on algorithms at the speed of light.
This post was edited on 4/9/11 at 2:20 am
Posted on 4/9/11 at 12:42 am to Nyala
Record profits?
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