Posted on 04/17/2021 4:36:37 AM PDT by MeneMeneTekelUpharsin
Yes, and no. The answer is not whether or not what goes up will go down, but when. When is “too high” too high. I thought it was already too high in 2016, but I’m really old school and it had not yet reached today’s peaks then. I would not pretend to know when the next down market will begin, but like gravity it will, some day.
Hope you just don’t have everything in one basket that’s all. Because even when the markets fall some things will fall not as badly as others, some may not even fall at all, and some will be wiped out. Spread what you have around, if you can, and if you can’t then maybe consider some “hard” assets like precious metals, if you can. They seem to never fall as much a the stock markets when the stock markets crash and sometimes retain their value after a crash.
I have been enamored by the DOW, too often.
The S&P is a broader based broader gage than the DOW, as I was once reminded and had to admit when I looked at what composes the two indexes.
Pretty much it in a nutshell, uber low interest rates deter people from savings or cash, thus money flow into equities and tangibles like real estate or gold.
My father always had a saying, “Nothing goes in a straight line”. So yes these bull markets become bear markets and then reverse course again. Market timing is scary and even the pros dont always get it right. Be diversified. Play it a bit more safe as you age.
As for the NASDAQ or QQQ yes it is more volatile, with technology you are betting much more on innovation or things to come. In recent times, the FANG stocks have really driven this rise, but they are THE ECONOMY now. Overlay AAPL or APPLE over that chart and you will see what drives it.
I would also add that Covid on many levels has driven segments of this market. Sitting at home has driven people to even more technology, more electronic gadgets to work from home, Apple, more deliveries from Amazon and Target.
And in addition, young people seem hip on investing, they have their gadgets and apps and are adding small amounts of money to play in the Wall Street game as they see it. From Crypto trading to the REDDIT stock crowd funders and crashers... interesting times.
I have some in gold stock, I have TSMC which is a semiconductor maker, Marvell Industries, a “weed” grower, and some other in ETFs.
Agreed
1. A minor nit: after clicking "logarithmic" you must then click "Draw Chart" or nothing will happen.
2. I agree, the curve is not a huge cause for concern. Stocks have gone up close to 10% per year for a century or more. Tech stocks, which are concentrated in the NASDAQ, have done better over the past 20 years. This is a natural extension of the tech revolution.
Even on FR we communicate instantly by computer/internet and can't remember that 30 years ago putting together a group like this was impossible and the tremendous progress over that time.
DW and I have been invested in QQQ, the NASDAQ 100 tracking index fund for 15 years. It has been a nice ride, which I think will continue.
Even my pension fund has gone global, investing in index funds of all sorts in markets in Asia and Europe besides the U.S. They have done well the past few years, though not as well as the U.S. stock market alone. To me that is a good sign. Having not been totally into the “boom” then in the bust the fund may not do as badly as the U.S. stock market.
I think what we’re seeing here is an effect of the general rule: The stock market is a good predictor of how much money will be changing hands in a year or two.
When the market sees inflation increasing, the market goes up, anticipating higher prices for the goods that will be flowing. When the market sees inflation subsiding, the market goes down, anticipating lower prices (than it was previously expecting).
In everything except inflation, the market goes up on positive economic news (something that will increase the flow of commerce), and down on negative news. In inflation, the market goes down on good news (inflation subsiding), and up on bad news (inflation on the way).
My unducated guess is that the market sees an inflation tidal wave, and is going up in anticipation of higher asset prices. If the market is correct, there will be a correction, not in terms of stock prices going down, to indicate lower value, but in terms of the value of dollar going down, so the stocks will have lower values, even at the same prices. I do not expect stock prices to drop, I expect the prices of other things to catch up with them.
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