Do you folks think we'll see dows at 7000 levels ever again? Was it indeed 'once in a lifetime opportunity' in 2008?
I still don't trust the market and I think the fundamentals are still not strong enough. I think the economy is still recovery but at a sluggish state. We don't know why it keeps going up like crazy.
Anyone think of 'pulling out'.
"It's only when the tide goes out that you learn who's been swimming naked."
Comments
Monetary policy encourages lending, which means lower mortgage payments and more investment capital.
Company balance sheets are strong and earnings generally up.
Market does not seem over-valued (see below).
Congress slowly starting to work together, finally.
World seems in relative state of peace.
Housing market recovering, finally...people selling homes quickly that have been unable to sell for years.
Auto industry having best performance in years.
Banks cleaning-up their toxic loans.
AIG, GM, others paying back government bail-outs.
Gasoline prices stable.
Education levels remain high...US holds largest number of institutions of higher education. While formal degree costs are increasing, access to subject matter material is more abundant than ever via free links, like Academic Earth.
Yankees are in 2nd place, despite injuries to Jeter, Teixeira, Granderson, and A-Rod.
Granddaughter on the way.
We're in a bull market...reluctant and gets no respect, but bull nonetheless...Dow just crossed 15,000!
What's not to be optimistic about? (I know...the "3D" hurricane. It's true that some believe we are not in a bull market at all but instead in the 12th year of a secular bear.)
AAPL is paying a dividend. And, dividends in generally seem to be on the rise and many companies buying back stock (eg., BRK, GE).
People living longer than ever before, thanks to amazing technology and procedures, like carotid artery stenting.
US recently paid down some of its national debt, can you believe?
Honestly, I would rather see continued steady growth, lower volatility than another 2008 "opportunity."
It has been said that investors should never bet against the Fed. I think this still holds true...but for how long (?) I think that the Fed is causing major long term issues that must be dealt with down the road. We'll see what kind of magic they have when they cannot keep holding rates down at these bargain basement levels. With the amount of dept our gobermental types have created - sooner or later - the price will be paid with another crashing market. High tech, housing, and ?
Until we have good job growth ( with higher paying jobs that can support the cost of living ) this mess will continue. Every single item has increased ( gas, food, housing, etc ) but wages. The same problem still remains, imo
They can inflate the economy with lower rates shorter term and gather millions of cheer leaders.... however, the dept burden will be too much for middle America without real cost of living adjustments. I'd much rather see national growth based on consumer spending from reliable good paying jobs. Government spending & lower rates only cover up the real issue. They already want a college degree for the standard 16 dollar an hour job. How can this buy a house, car, support a family, etc? And, they raise our taxes & cause our medical insurance to jump 30% ... how does this promote job growth?
No...I'm not any sort of union rep
end rant
As many have noted, there's no one right way to invest. But, I believe age is one of the most crucial ingredients in the equation. There are exceptions where age is inconsequential - pension funds and university endowments for example. And, if very wealthy and viewing investments primarily for the benefit of your surviving heirs, age matters less. I'm near-70 and quite conservative. Still have some fine balanced funds (like DODBX and OAKBX) which do well in rising markets - but very little In pure-play equity funds at this point.
Your underlying premise is correct John. Stocks certainly were a much better bargain in March 2009 than they appear today. FWIW. Regards
(This post was edited in the interest of brevity.)
When stocks hit new highs, the natural impulse is to look for signs of over valuation, but there are good reasons why US stock prices are elevated: cash flows are high, growth looks good, the macro risks seem to have faded (at least some what) and the alternatives are delivering lousy returns. In the near term, stocks remain vulnerable to two possibilities. One is that another macro crisis will pop up (Italy, Spain, Portugal or a non-EU black sheet) that will cause equity risk premiums to jump back to the 6%+ levels that we have seen so often in the last 5 years. The other is a sudden surge in interest rates, unaccompanied by better earnings or higher earnings growth. Since all risky asset classes (corporate bonds, real estate etc.) will be also adversely affected by either of these developments, I don't see much point to shifting from equities to other risky assets to protect myself against these risks. I could, of course, choose to stay in cash, but as the last 5 years have indicated, waiting for the "right time" to invest can leave you on the sidelines for too long. So, I am going to stop worrying about the overall market and go back to finding under valued companies.
http://aswathdamodaran.blogspot.com/
Posted by Aswath Damodaran
http://economix.blogs.nytimes.com/2013/05/03/keeping-up-not-getting-ahead/
But like PB said, "don't fight the tape" is the operative phrase; the stock market is not the job market, and not the economy, & with the Fed staying the course, this could keep going for who knows how long. I don't know about Dow 7,000; I can't imagine stocks aren't going to be lower than they are now at some point ... but again, that could be a while and mucho $ from now.
guardian.co.uk/business/2013/apr/04/japan-quantitative-easing-70bn
reuters.com/article/2013/05/02/us-ecb-rates-idUSBRE94100520130502
I sincerely hope those unemployment numbers are trending in the right direction...