TheBigShort
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stocks, bonds, cryptos, property etc...its fairytale stuff, isnt it?
Between stocks, bonds, cryptos, property etc...its fairytale stuff, isnt it?
If it transpires that everything is overvalued, what then? Is the global financial system caught in a deflationary trap?
This has left a legacy of seeking safety over return with some investors. Legislation inspired by the crash tightened capital requirements for banks and insurance companies, pushing them towards bonds.
Stocks are highly valued because interest rates are so low. Because profits are rising. Because politicians are in tax cutting mode.
Property is highly valued, in Ireland at least,
Because the construction industry is undercapitalised. Because the construction labour force has shrunk. Because banks are unable or unwilling to lend.
I agree profits are rising, economic activity is increasing. But it hardly correlates with the record prices in US stock markets? At least I wouldnt have thought so.
One of the expected side effects of QE is that it should create consumer demand, and kickstart price inflation. We haven't really seen that, but instead because QE is buying up all the bonds, the extra supply of money is being pushed elsewhere and driving asset price inflation instead.
There's also a school of thought that a move to passive investment is leading to stock price inflation - funds have to invest in the whole index, and therefore there is less thought going into investment decisions.
A dip in the market shows "how wrong it was..."?The ftse did not perform well up to recently but it's commodities and financials exposure is definitely helping it now as it is not fallen at all this year even though the nasdaq and s&p indexes are down heavily.
Just shows you how wrong it was to be chasing the US tech stocks and even S&P500 during the covid years, the old world has returned with a bang again
Very short term view of things Joe. If you had invested €100 in the FTSE 100 10 years ago, you'd have €190 today. Meanwhile, I would have €402, more than double the return.The ftse did not perform well up to recently but it's commodities and financials exposure is definitely helping it now as it is not fallen at all this year even though the nasdaq and s&p indexes are down heavily.
Just shows you how wrong it was to be chasing the US tech stocks and even S&P500 during the covid years, the old world has returned with a bang again
I wasn't saying that though was I ? I was saying that people should have been moving money into ftse 100 stocks during the pandemic not a decade ago. There is a big sell off in tech and growth stocks due to inflation and rising interest rates now, they seem to be now blowing off all the pandemic related excesses . It looks like a very similar theme to what happened after the dot com collapse and the big shift out of technology and growth back to old world stocks like energy and financials that make money today. Because of high inflation rates companies that make money today are being revalued upwards and vica versaVery short term view of things Joe. If you had invested €100 in the FTSE 100 10 years ago, you'd have €190 today. Meanwhile, I would have €402, more than double the return.
I would happily take the short term pain for the long term gain.
I understand your point. It wasn't clear from your original post.I wasn't saying that though was I ? I was saying that people should have been moving money into ftse 100 stocks during the pandemic not a decade ago. There is a big sell off in tech and growth stocks due to inflation and rising interest rates now, they seem to be now blowing off all the pandemic related excesses . It looks like a very similar theme to what happened after the dot com collapse and the big shift out of technology and growth back to old world stocks like energy and financials that make money today. Because of high inflation rates companies that make money today are being revalued upwards and vica versa
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