Yo! Maybe institutional traders haven't read this article yet because stock indexes sagged yesterday and this morning futures are downbeat 0.7%. Metals are steady tho...
Posted on 05/12/2015 5:44:08 AM PDT by expat_panama
The doomsayers always come out whenever stock markets get more volatile, like they have this month. These gloomy prophets go on and on about how derivatives are going to cause another financial crisis, or how valuations are stretched, or how equities will collapse whenever interest rates rise.
Individual investors read the commentary by these experts and wonder if they should adjust their portfolios, or even sell everything and wait out the impending collapse.
But before you do that, take a moment to calm down and have another think. In every single one of our 30 years in the business, someone, somewhere, has predicted a calamity. Sometimes, these prophets get it right, even if only by sheer coincidence.
Let’s look at five reasons though why you should ignore such dire market predictions, and those that make them.
Nothing grabs headlines faster than some so-called expert predicting a 50-per-cent market collapse. The media hops on board, further fuelling the fire in the market.
But keep in mind that almost every prophet out there has something to sell — be it a book, newsletter, website, research or alternative investment — that will supposedly protect against a crash.
Some, such as famed broker/dealer Peter Schiff, for example, are experts at using the media to highlight their dire predictions. Many authors love the publicity a doom-and-gloom prediction gets. Who wouldn’t want to buy a book telling you how to protect your investments against a crash?
I have seen numerous market crashes, financial crises, dot-com...
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(Excerpt) Read more at business.financialpost.com ...
Yo! Maybe institutional traders haven't read this article yet because stock indexes sagged yesterday and this morning futures are downbeat 0.7%. Metals are steady tho...
Most DOOMSAYERS have something to sell??
In my experience most polyanna, “ pay no attention to the man behind the curtain” brokers have something to sell.
Most DOOMSAYERS are BROKERS with something to sell. Namely an annuity that makes them more money than anything else they can sell you....
Gold & silver are steady at well below historic peaks.
It’s not Germany 1923 by any means.
IMO watch oil technology stocks. Obama wants real bad to hurt our growing energy independence. Gas is up, too.
Those buy gold & buy silver infomercials are a real hoot.
Although I somewhat agree that doomsayers are often wrong, I really think we are now in a ‘new normal’ for the stock market; in the first place, there has never been such a large ‘quantitative easing’ which, along with low to nonexistent interest rates, warps the economy by making the stock market about the only place an investor can make a decent ROI; that however causes valuations to be inflated, and sets up a gigantic bubble; the old saw, ‘what goes up must come down’ certainly applies here; when this bubble does burst, I expect something on the order of a 50% correction. That’s why I sold at the end of 2014 and am holding all in cash, hoping to buy in at an unheard-of low...I am feeling richer already!
I have nothing to sell.
However, I do see patterns fairly well. This September will be the low point of a pattern that goes back over 100 years in the market. My advice is to get out of the market before September.
I've got friends who cashed out when the DOW reached 13k again. They're still hanging on to cash waiting to get back in. They're down 30% so far.
1.) It cost me nothing to liquidate
2.) If cash turns out to be worthless what are stocks going to be worth?
3.) I agree that timing the market is a fool’s errand, but as I said we are now in a ‘new normal’ where the old rules no longer apply; this is a one-off situation.
4.) If the DOW only falls to 9k I will be surprised.
>> IMO watch oil technology stocks
I “watched” the Halliburton I bought after the last big price drop go up 17%.
An investor can do much worse then to carefully buy dividend-paying equities in healthy US companies. Preferably on a dip rather than at full price.
6) Charles Schultz was brilliantly prescient in his Peanuts strip decades ago when through Lucy he observed that “the reason mountain climbers are tied together at the waist is so that when one falls, they ALL fall.”
I got my undergraduate degree in Finance from a major university over 30 years ago. Only one thing that one of my professors told me has stuck with me all of these years.
If you pick stocks completely at random you will do better over time than over 50% of the professional money managers.
If gold is worth 2000 dollars per ounce and the dollar loses value to the Yen or something. Say the dollar loses 50% of its value... how many dollars is the ounce of gold worth?
If a company is worth 2 billion dollars and the dollar loses 1/2 of its value, how much is the company worth?
If an annuity is worth 50,000 dollars and the dollar loses 1/2 of its value, how much is the annuity worth? Its still worth 50k dollars which are now worth 50 percent of what they were.
If a rent house is worth 100k and the dollar loses half of its value... how many dollars is the rent house worth?
If a dollar is worth a dollar, and the dollar loses half of its value... how much is a dollar worth?
They show up on Rush Limbaugh breaks sometimes, but my thinking is they're not "Rush-selected" sponsors but rather local noise.
“Holding all in cash”???? Seriously? The debasement of our fiat dollar (QE infinity) is quietly stealing value right out of your wallet.
Balance is Key: Equities - Farmland - Precious Metals - Ammo
Yep....
“Those buy gold & buy silver infomercials are a real hoot.”
I changed my way of thinking with the market. I found a 3 dollar oil exploration stock that has good capitalization and can ride out the storms. It goes from 1.75 to 8.00 a share.
Whenever the stock goes under 3, I watch it for a week or so. If it keeps going down, I buy it. Done this twice already and it seems to work for me.
But I *like* panic and chaos.
Interesting. There are lots of doom'n'gloom newsletter/books out there that say it's too late and we're doomed, but I've never, never seen an "absolutely-no-risk-nothing-to-worry-about" newsletter/book. OK, we have heard from gold vendors that insist that gold is non-risk, but it's usually based on the idea that the end of the world's coming.
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