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Dat Dow tho
- Thread starter Jack Davenport
- Start date
Instead of posting song lyrics and comedy skits, you had better figure out how you are going to be able to come to terms with the fact that your beloved Obama could be facing a criminal indictment.
xfire
New Twitter/X @cxffreeman
Need a different thread for that.
himperv303
Banned
https://www.cnbc.com/2018/02/05/the...ops-for-the-dow-jones-industrial-average.html
Gotta love the low information Obama base.
Gotta love the low information Obama base.
The Dow drops 1,175 points on Monday then follows up with another drop of 1,033 today. It's not the end of the world but is disconcerting. Many are attributing this to the fear of inflation and the possibility that the Fed will then respond by increasing interest rates. However, the Fed has been signaling a rate increase for quite a while now so seeing such a huge correction like this is surprising. It just goes to show you how volatile the markets can be. This is the reason why it's so stupid to tout the market like Trump did. The stock market isn't the economy. Like Jay Carney said, if you claim the rise, you own the fall.
Would be interested to hear Rey's take on this since he's also in finance
Would be interested to hear Rey's take on this since he's also in finance
And Carney has been reminded of all of the times as the mouthpiece for the administration that he beat his chest over the markets. The past two or three one day losses are not even in the top 100 of one day drops.
The market is overvalued and probably will settle down around 21-22000.
The fact that Rey hasn’t commented on it, probably is an indication of how much that it concerns him.
The market is overvalued and probably will settle down around 21-22000.
The fact that Rey hasn’t commented on it, probably is an indication of how much that it concerns him.
Maybe just maybe a cotdam budget that adds 1.5 trillion to the debt over 10 years is worrying investors. Not to mention the possibility of rising inflation or interest rate hikes.
Rey C.
Racing is life... anything else is just waiting.
How so?
The only component of wealth creation (in the equity markets) that I can think of that necessarily relies on someone losing money is shorting. In that case, the only way that Player A can make money is if the shares that he borrows from Player B, who is long those shares (so that A can sell what he doesn't actually own), is for those shares to go down in value. So yes, B's shares go down in value, and at least on paper, he has "lost" money. People who were short most any equity over the past week made money, while those who were long lost money on paper.
But not that many individual investors short equities. Most people employ long strategies. And most individuals are investors, not traders (a HUGE difference). In order for Player A to make money on a long position that he buys from Player B, it's not necessarily the case that Player B has lost anything on those shares. He may be selling at a huge profit. Maybe Player B bought his shares at a lower price than he's selling them to Player A for, and he's quite satisfied with his gains and simply wants to move on to another investment. Yes, people do lose money on investments and trades. But in 35+ years of investing in and studying the equity markets, I've read no factually based or valid study that concludes that "most of the wealth made in the stock market comes from people who lose money". Some? Yes, of course. Most? No.
I'm not trying to pick a fight or anything. But that's simply not true.
Rey C.
Racing is life... anything else is just waiting.
To be honest, Rey's been incredibly busy of late (gathering retirement acorns and such) and hasn't been here that much. But no, while somewhat shocking to see my account balances dropping by large amounts on a daily basis, apart from some limited trading, I'm more of a long term investor. So no, it's doesn't really concern me that much - as long as I believe we are simply correcting from overbought levels and not entering into a bear market. I do not think that is the case. The incredible intraday swings and volatility (measured by the VIX) are pretty amazing to watch though.
I believe that Stable Genius is correct, in that solid growth possibly leading to higher wages and inflation, and that possibly leading to higher than expected interest rates, scared the market. Inflation and higher rates are not the friends of equities. I don't know where, but I also suspect that you are correct, in that the broader market will settle into a more normalized trading range and take account of itself. The equity markets really had gone up too far too fast. But damn, that gravity! :eek:
Well, the experts have been saying that “ solid growth, wages and the fear of inflation” are what is behind the correction.
So if Ice is correct, it means someone was correct before him.
Surely you are at the age that “ long term” has to mean something entirely different for you than people much younger.
So if Ice is correct, it means someone was correct before him.
Surely you are at the age that “ long term” has to mean something entirely different for you than people much younger.
Rey C.
Racing is life... anything else is just waiting.
Yes, when there is a perception that growth (combined with skilled labor shortages) could lead to higher than normal wage growth and inflation, that's generally not good for stocks because that could lead the Fed to raise interest rates. Two things there: #1, the Fed has a reputation for overshooting on interest rate hikes when attacking inflation. Higher rates present an alternative opportunity in bonds, which isn't good for stocks. And #2, if they overshoot too much, that could choke economic growth and lead to a recession... again not good for stocks.
I'm only speaking to an established, historical principle of equities... not so much who was right first. I saw that you both had accurate summations in your posts.
Yes, that's true. Probably more to do with asset allocation (bonds vs. equities), but "long term" to a 25 or 30 year old is different than to me. The main point I'm making there is that if one is any sort of long term investor (whether it be 10 years or 30 years), studies have shown that trying to time market entries and exits (usually based on emotion) produces lower returns than just staying the course, no matter what. But someone who is staring retirement in the face shouldn't be 90% in equities or aggressive growth mutual funds/ETFs, or too heavily invested in a single company's stock in a 401K or whatever... as many older workers were in 2008-09. People have to learn to plan for their retirements, and make the necessary portfolio rebalancing adjustments as they age.
I'm only speaking to an established, historical principle of equities... not so much who was right first. I saw that you both had accurate summations in your posts.
Yes, that's true. Probably more to do with asset allocation (bonds vs. equities), but "long term" to a 25 or 30 year old is different than to me. The main point I'm making there is that if one is any sort of long term investor (whether it be 10 years or 30 years), studies have shown that trying to time market entries and exits (usually based on emotion) produces lower returns than just staying the course, no matter what. But someone who is staring retirement in the face shouldn't be 90% in equities or aggressive growth mutual funds/ETFs, or too heavily invested in a single company's stock in a 401K or whatever... as many older workers were in 2008-09. People have to learn to plan for their retirements, and make the necessary portfolio rebalancing adjustments as they age.
Rey, has your work ever included being a fiduciary?
himperv303
Banned
Rey C.
Racing is life... anything else is just waiting.
Nice moves: Dow up 3.25% for the week, S&P up 3.54% and the NASDAQ up a whopping 4.17%. :nanner:
The only sad people this past week were the ones who were short equities or invested in cryptos/craptos (aka, "monopoly money").
But like I said, don't worry about the weekly, or even monthly moves. Unless you sit in front of a bank of monitors, looking at charts and trends for a living, stay the course. Be an investor, not a trader.
Trading can distract you from other things in life.
The only sad people this past week were the ones who were short equities or invested in cryptos/craptos (aka, "monopoly money").
But like I said, don't worry about the weekly, or even monthly moves. Unless you sit in front of a bank of monitors, looking at charts and trends for a living, stay the course. Be an investor, not a trader.
Trading can distract you from other things in life.
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