Skip to comments.Don't Let the Market Scare You: Why Investors Should Learn to Embrace Volatility
Posted on 02/26/2012 3:09:02 PM PST by geraldmcg
Now everyone is talking about rising gas prices against a weak dollar. And thats before theyve even finished exhaling on the debt, unemployment, wages, housing, or taxes and regulations.
So, why is seasoned investment manager, Steve Selengut, telling investors and working Americans with retirement plans to enjoy the ride?
(Excerpt) Read more at 888webtoday.com ...
Get ready for fall.
Get ready for a fall.
The market is at 13000 on almost no volume,
Inflation is rampant
The euro is on the verge of collapse.
I would proceed with caution
The artificially low interest rates are designed to kick people out of bonds and bond funds. That bubble will burst when everybody heads to the exits at the same time. The money will have to go somewhere, and it will be used to inflate all other asset classes, such as stocks and commodities. Then Obama will be crowing about the improvement in the stock market while people are struggling to pay $4 or $5 plus gas thanks to the resulting inflation. He will be talking about the GDP numbers without regard that most of that money was borrowed, increased the deficit, and will have to be repaid some time in the future or a default will happen.
The author at the end of his article talks about closed end municipal bond funds and how well they have done in the past few years. That happened in an atmosphere of falling rates. Given that we’re expecting the reverse, I wouldn’t touch those with a 7 foot pole.
Amen. And if they aren't, they should be, IMHO.
No way a retail investor can keep up with the big guys. Computerized trading, thousands of buys and sells every second, makes my stomach hurt just to think about it.
Been out of the market for years. Have no plans in that direction.
The artificially low interest rates are designed to kick people out of bonds and bond funds.
Maybe you but not me.
I think the last part of post #7 was directed at at winner3000.
You are correct EVO X. Sorry.
If this rally was for real you’d think more money would come out of government bonds and go into stocks. That doesn’t seem to be the case. A few of the bond funds I monitor are higher than last fall when the rally began..
I agree with you. Wife sold the last of her utility stocks the other day. Kept the long term US Bond mutual funds as they were bought a long time ago and actually appreciated in value. If they are screaming for you to buy, probably best to sell as soon as possible ... they need suckers to keep the scam going.
IMHO, this current “rally” is fueled by traders chasing their tails and a few retail people who think they can keep up. Won’t happen.
This is a house of cards built from smoke and mirrors.
What do you think is a realistic value for the Dow? I’m thinking around 9000, maybe even 8000. Certainly not what we have today.
Wall Street needs to scare up some retail bag holders for their confidence game.
The fund managers are going to stuff bonds to raise the dollar one too many times and pay the consequences (investor pitchforks, torches,...).
I am not sure how low it goes. It is sort of like a Florida beach view property. Some people see extreme value in having a beach front property. I stayed in a beach front condo near Tampa that peaked out at $800K during the bubble. Current selling price is somewhere around $400K. $400K seems like a hell of a deal until you find out the walls and ceilings are paper thin. I wouldn't pay more than about $200K for a similar condo. However; there are people that have more money than they know what to do with, and $450K would be a good deal to them..
(Kept the long term US Bond mutual funds as they were bought a long time ago and actually appreciated in value.)
Sell them while you still can. Current bond rates are rigged so that they “pay” a net negative interest rate (net of inflation). People are not going to keep buying bonds that they immediately start losing money on (in the future people will look back on this period and wonder why so many people did just that for so long). Most of the bonds are still being bought by banks trying to shore up their reserves with “safe” investments (that’s why I would still stay away from bank stocks-witness the trouble European banks are having due to their investments into “safe” sovereign debt such as Greek bonds). Once the demand for bonds decreases, the Fed will be forced to raise the interest rates they pay out, or our increasing debt will not b refinanced. Once that happens, the value of your long term bonds will plummet.
Buy physical gold, and even better, silver, as well as select precious metal miners (the ones expected to increase production, and have a low cost). The price of gold and silver are not becoming “too expensive” as much as the value of the dollar is decreasing precipitously.
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