"Americans have rarely been this giddy about the stock market.
They are piling into stocks as major indexes reach new highs and placing bets
that the rally that has driven the S&P 500 up 18% this year has more room to run.""Investors have been reassured in recent weeks by data showing the economy is still humming along
and Federal Reserve Chair Jerome Powell’s signals that an interest-rate cut is just a few weeks away.""Even during the brief turmoil in early August, investors kept buying stocks.
U.S. equity funds drew inflows for eight consecutive weeks through late August, according to EPFR data."Contrarian indicator?
BTW, where are the dental patients' yachts?
https://www.msn.com/en-us/money/markets/americans-are-really-really-bullish-on-stocks/ar-AA1pSZoi
Comments
If you missed them, you made less money.
If you bought others, you made less money.
If you were out waiting for an opportunity, you made less money.
If you thought they are overvalued, you made less money.
If you stayed clear of the crowd, you made less money.
When US LC are doing well, it's the easiest way to make money and it lasts for years. 1995-2000 + 2009-2024 is more than 20 years
at very opportune times and never experienced losses greater than 3%!
What's not to like?
Easy, peasy...
When US LC are not doing well (2000 - 2009), it's an easy way to lose money for years!
However, FD does not believe in diversification (regardless of the empirical data)
and would like everyone to know he wouldn't be caught dead in an underperforming fund
for any appreciable length of time.
Some people claim they know just when to rotate in and out of stocks. Those people are full of ***t.
Second, my older system when I was an accumulator:
About every 4 months, I screened wide-range funds and selected the best risk/adjusted performing funds based on 1-3 months + also looking good for 1-3 years. This exercise limits funds that lag for months-years. The main idea is to be mostly in the right 1-2 categories.
You can see an example for indexes (I used managed funds because I believed in star managers) (here).
Gunjan Banerji was born in 1992. For some perspective …. That year Louis Rukeyser’s Wall Street Week was completing its 22nd season on PBS. 5 years had passed since the global stock market “flash crash” of ‘87. She would have been 6 or 7 when the tech sector sizzled and 8 when the bubble burst in 2000. (Maybe some nervous playground banter?) She would have been 16 in 2008 during the depths of “the great financial crisis” (and subsequent 50%+ drop in the S&P). No doubt, this great unwinding of stock market mania was discussed / analyzed to extent in her high school business / social studies classes during these teen-age formative years.
in her high school business / social studies classes during these teen-age formative years."
LOL!
I'm not so sure about this Hank...
This 4-day trading week is starting to resemble a ski slope.
Maybe she’ll soon need to revise the title of her article:
Something like this might work - ”Americans Are
Really, ReallyBullish on Stocks “My jest was directed toward her relatively young age (compared to many of us here), the silliness of the title and what I consider to be an overly euphoric public attitude toward stocks - which the article accurately portrays. I also realize that it is the editor (not the author) who usually creates / assigns the title (mostly to grab eyeballs). The title may also have different variations depending on where it gets published..
One wonders too how much “chopping” the editors applied to the article after it was submitted? Our shorter and shorter attention spans are causing management across all media to strive for simplicity and brevity. It’s Pogo all over again - “We have met the enemy …”
I see this all the time when many Barron's headlines on Fridays (possibly by authors) are changed for the print version on Saturdays (more flashy, apparently by the editors).
I also see this for personal finance articles that I write for a local community paper and its editors often change the titles that I submit.
BTW, I follow Gunjan Banerjee (@GunjanJS) at X/Twitter and her stuff is generally good. I don't go by age - in fact, age doesn't correlate well with investments or personal finance.
Point #3 - I don’t know how one’s perspective can not be shaped to some degree by their life experiences. My parents and most of the adults I knew as a teen had lived through the Great Depression. Their view of the stock market was much different from those of us about to enter college in the 60s. And by the time I’d graduated and began working / investing the public perception was beginning to shift. Equities were becoming our friend again, rather than the nightmare my parents remembered from their youth.
Call me dumb. But I am forever changed by having lived through the 2000 Tech-Wreck and the ‘07-‘09 global stock market / real estate meltdown. How to you “teach” how those monumental periods felt to a much younger person who didn’t experience them? Were the article based solely on crunching numbers, comparing different market sectors, assessing the role of interest rates, etc. I’d not raise the point. But the article is based largely on public perception ( ie: “feelings”).
Other generations of adults have their own discoveries and life experiences; as well as their parents.
Within our neighborhood (mostly middle class) finds a range of problems, of which; some are results of a changing economy/and investing markets over the past 20 years.
We have parents who have helped some with buying a first home, we have several who still have a young adult child living with them; as there isn't enough money for the young adult child to afford an apartment and a few households where the siblings did move from the household, but had to combine their incomes with one another, and in some cases, a boy or girl friend in order to afford an apartment.
The age range is part of both of these groups:
--- Millennial's, ages 28 - 43
--- Gen Z, ages up to 27 years
I know some of these parents/children are aware of the impacts of the negative financials of markets/jobs and work related over the past 20 years, which apparently have affected the ability, from lack of sufficient money, to cause the 'above' that I wrote.
So, IMHO; there are other 'modern' age groups having perhaps a similar monetary experience as could have taken place with the grandparents and parents of 'baby-boomers'.
LASTLY, I do believe this is a common circumstance within many areas of the U.S.
Remain curious,
Catch
”The Crushing Financial Burden of Aging at Home” - by Clare Ansberry and Anne Tergesen
It’s a sobering read detailing the story of seemingly hefty life savings wiped out in a few months, the difficulty of finding trustworthy trained in-home care workers, the burdens faced by care-giving relatives.
I won’t try to link it. But if you have access to today’s WSJ, highly recommend.
I do not see high correlation between intelligence and education or age. ( I have learned more life lessons from small kids and animals than from people who are older than I am.)
I thought the title of the article appropriately conveyed the necessary sarcasm.
True.
Yet, @hank's point is valid. We all grow our own a priori assumptions, with which we approach information, and eventually --- in the case of those who care to actually think deeply --- we operate with a weltanschauung, a world-view. It will serve to color our experiences, and the way in which we understand and employ what we learn.
From "Skyfall:"
Q: Age is no guaranty of efficiency.
Bond: And youth is no guaranty of innovation.
For me, a group of words that belong together and necessarily correlated. I will also include the small kids and animals.
in·tel·li·gence
/inˈteləj(ə)ns/
noun
1.
the ability to acquire and apply knowledge and skills.
The article should be accessible to everyone when using the link below.
https://www.msn.com/en-us/money/markets/americans-are-really-really-bullish-on-stocks/ar-AA1pSZoi
Yes, it is. Had a brain fart, thinking about another link to WSJ I can't access.
I love reading the WSJ and willingly pay to read it along with several other financial publications to which I subscribe. Certainly, the fact that Gunjan Banerji’s work meets the Journal’s high standards is testament enough to her journalistic achievement. There never was any intent on my part to question her judgement, character, intelligence, balance or other. I’m especially saddened if anyone took my post as an unkind affront to a friend they know personally or an online personality they have close contact with. It wasn’t meant that way.
(I have found mistakes in the reporting of even the so called subject matter expert journalists. They can make honest mistakes and some of them really embellish.)
1) Bogle, and Burton Malkiel's Book, Random Walk proved decades ago that if you buy and hold the SP500 you would likely beat most investors and mutual funds for decades to come. There is not much to discuss after that, but many still do.
2) Many writers are very educated but it has nothing to do with market performance So, they discuss mostly economics or tell you what happened already; they repackage the same articles they published before with changes to fit whatever.
If economics was the best way to make money, Profs would be the richest people on earth.
3) We also know that most predictions are useless.
After decades of listening and reading thousands of articles and interviews, I came to a conclusion based on facts that the economy, inverted yield, PE, PE10, valuation and many more can't predict what markets would do next 1-4-16 weeks or even months and years.
4) Some "experts" are smart and use history for their predictions. Example: Prof Siegel basically has 2 long term opinions a) Stocks will make money next year; b) Stocks will make more than bonds...I say duh. Since 1980, the SP500 has been positive about 80%.
He missed every down year. To see other experts, read (link).
5) I have been reading this type of articles for years, and they follow the above. I just do it because investing is my passion. None made me real money. I got a lot more great ideas from handfuls of posters on several sites, including this one.
6) This is why I created my own site. This (link) has several learning articles.
"Bogle, and Burton Malkiel's Book, Random Walk proved decades ago that if you buy and hold the SP500 you would likely beat most investors and mutual funds for decades to come."
Adding a low-cost S&P 500 fund to your portfolio can be part of an effective investment strategy.
But what if an investor doesn't have the risk capacity or risk tolerance to be 100% invested in equities?
If someone heavily invested in the S&P 500 needed to make withdrawals
from 2008 - 2011 how would this have impacted portfolio longevity?
"Many writers are very educated but it has nothing to do with market performance So, they discuss mostly economics or tell you what happened already; they repackage the same articles they published before with changes to fit whatever."
This is no different than what some posters do on investment sites.
They regurgitate essentially the same information (with minor intermediate changes) ad nauseam.
"We also know that most predictions are useless.
After decades of listening and reading thousands of articles and interviews, I came to a conclusion based on facts that the economy, inverted yield, PE, PE10, valuation and many more can't predict what markets would do next 1-4-16 weeks or even months and years."
Many predictions turn out to be inaccurate.
However, longer-term "predictions" may be useful in setting expectations which can be valuable for planning.
Unfortunately, there are no simple metrics that can reliably and consistently predict future market performance.
"I have been reading this type of articles for years, and they follow the above. I just do it because investing is my passion. None made me real money."
Reading numerous articles which are deemed not worthwhile seems like an awful waste of time.
...and isn't that really, really scary!
I'm going to throw out a WAG that there's still a lot of cash out there on the sidelines.
If I'm wrong, it wouldn't be the first time.