Posted on 12/30/2017 10:12:00 AM PST by Eagles Field
Predictions?
But, isn’t the stock market always based on investor’s perceptions of the future?
Maybe you are trying to make a different point which I am missing.
But when you say the stock market is not based on reality, isn’t it based on the investor’s outlook for the future?
Aren’t stock prices based on willing buyers and sellers agreeing that these are the values of the various stocks being traded?
Aren’t both buyers and sellers satisfied that these are the values since they are executing the trades at those prices?
Why are you so down on bonds? Bonds are a good option for the older investor, as they are not as risky as stocks, and while they do not generate some of the high returns that stocks do, they generally do return a steady, though somewhat modest income that usually beats the rate of inflation.
6-8% higher than today
Pi
Oil’s going up a little, but more debt will likely be shoveled to it to keep things looking up, especially for lower fuel costs for commercial transportation corridors than other areas. The more optimism, the better for the next two or three years at least.
Because of likely unavoidable higher transportation fuel costs in the near future (maybe two or three years?) and for several other reasons, production facilities need to be brought closer to consumers. That’s why we’re seeing both negative and positive motivations for companies to do so.
Under $20k for sure, there has to be a pop coming soon.
“2018 is a year where the economy wil transform from Wall St to Main St”
Main Street needs Wall Street. It is how products are manufactured, transported, and delivered.
Both will see a massive gain in 2018.
Thus the stock market price is inflated by people who would lose money parking some of their wealth in savings like we all did in years past and instead park it in stocks and such. Their investment strategy is more a lack of options than an actual strategy.
Dump that much money in the market from the past two plus decades and you get the skyrocketing prices you have now.
I am sure the stock market would normally rise but without a realistic option to park your wealth in much safer interest bearing accounts people especially older people must be in stocks and mutual funds in any hopes of having some form of income other than Social Security and retirement accounts.
I have no problem with bonds. But balanced funds do not have bonds. They have bond funds. A fund of bonds is just as volatile as a fund of value stocks. Bond funds go up and down. There is no preservation of capital. A bond can be held to maturity which is how it preserves its value. But a bond fund has no expiration date. Bonds roll all the time. And the value of the fund goes up and down, just like a stock fund. Its not safe.
If you think that bonds are going down in value as I do, then you think bond funds are going down in value. This year the fed started raising interest rates causing bonds to go down in value. Last October the federal government said that they would stop buying bonds this year. And the ECB said that they would stop buying as many bonds in 2019. So bond funds will go down.
If you want income go buy some bonds. But if you think that a bond fund is the same thing. You are very wrong, and you will soon see the difference.
Did I say anything about bond FUNDS?
Did I say anything about bond FUNDS?
I have no problem with bond funds. But I do believe yields will go up next year. Especially later in the year. So expect to hold your bonds until termination. And consider yielding stocks like Microsoft as well. And try the refineries, PSX and MPC. They have a nice yield too.
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