Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Reply to @johnN: Europe really isn't fixable. QE3 won't fix anything, although that sort of thing will likely cause another temporary boost.
At some point market realizes this, then things get interesting. I think you're kind of seeing that at this point. If you believe that the Fed is going to come in and keep things up at any cost - then one has to be protected against that possibility.
I think Jacob Rothschild said it well the other day:
"Recovery may come, but not in months. In this reality, markets oscillate as before. Investment success in public markets has become a game of timing rather than fundamentals. The Western world may have finally woken up last year: it realised that the crash of 2008 was not just another market event, quickly to be recovered from."
"The debt mountain in government and households is just too high. The legacy of debt has first to be worked off. And that – people and markets now see – will take years. Recovery may come, but not in months. There are signs now that the impact from the loss of Western spending power has started to affect China too. In this reality, markets oscillate as before. But the ups do not last. And they are succeeded by falls. Unless one has a long horizon, investment success in public markets has become a game of timing rather than fundamentals."
People are desperate for yield, I think in many cases that won't end well but could go on for ages and depends on the asset.
I think the retail investor is WAY gone. I can't wait to see next week's fund flow data. That said, it becomes a matter of whether or not those who remain want to stay or head for the exits.
Dividend paying stocks are doing well, but it becomes a matter of what happens if things get worse and how long those hold up. I think there is a real chance that things could get very out-of-hand to a degree larger than the downgrade last year if some decisions are not made very quickly.
I don't think people should leave the market entirely, but it is an issue at this point where one has to be incredibly careful, incredibly skeptical (all this talk that the financials are "values" is BS - they don't know their own books in many cases) and have an incredibly long-term view. People need to not leave the markets entirely, but take their risk level down to where they can sleep at night - and then some.
Comments
At some point market realizes this, then things get interesting. I think you're kind of seeing that at this point. If you believe that the Fed is going to come in and keep things up at any cost - then one has to be protected against that possibility.
I think Jacob Rothschild said it well the other day:
"Recovery may come, but not in months.
In this reality, markets oscillate as
before. Investment success in public markets
has become a game of timing rather than
fundamentals.
The Western world may have finally woken up last
year: it realised that the crash of 2008 was not just
another market event, quickly to be recovered from."
"The
debt mountain in government and households is just
too high. The legacy of debt has first to be worked off.
And that – people and markets now see – will take
years. Recovery may come, but not in months. There
are signs now that the impact from the loss of
Western spending power has started to affect China
too. In this reality, markets oscillate as before. But the
ups do not last. And they are succeeded by falls.
Unless one has a long horizon, investment success in
public markets has become a game of timing rather
than fundamentals."
People are desperate for yield, I think in many cases that won't end well but could go on for ages and depends on the asset.
I think the retail investor is WAY gone. I can't wait to see next week's fund flow data. That said, it becomes a matter of whether or not those who remain want to stay or head for the exits.
Dividend paying stocks are doing well, but it becomes a matter of what happens if things get worse and how long those hold up. I think there is a real chance that things could get very out-of-hand to a degree larger than the downgrade last year if some decisions are not made very quickly.
I don't think people should leave the market entirely, but it is an issue at this point where one has to be incredibly careful, incredibly skeptical (all this talk that the financials are "values" is BS - they don't know their own books in many cases) and have an incredibly long-term view. People need to not leave the markets entirely, but take their risk level down to where they can sleep at night - and then some.
This all - quite simply - is a mess.