Stocks markets go up when interest rates goes down and stock markets go down when interest rates go up. I wonder if it’s as simple as that.
OT: Stock and Investment Thread
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FYI This account at its high in December 2021, reached $10,300 now down to $6822 and going lower. Thanks Joe!
High Earners Not Rich Yet…between piss-poor tax treatment with crap like AMT and phased out deductions this group gets crushed. Whereas, the ultra-rich and Hedgefund managers can play games like carried interest and creative tax shelters.
Not 100% correlation but there is some relationship
Interest rate increases do have an impact on investment decisions and generally mean some money that would go toward stock investments go to fixed income instruments
Anecdotally I am investing in stock index funds and over time if I earn an average of 8 to 10% I am happy. So I recently purchased $20,000 of I bonds because of the current rates which means $20,000 less that would have gone to stocks.
Im not looking for a political debate because I’m sure I’d lose. My main point was that everyone else including the ultra rich and poor get help but middle gets squeezed. Just about every tax exemption get phased out at ridiculously low levels, SALT BS a kick in the nuts, AMT, etc. Yet some billionaire hedge fund manager or millionaire law firm partner pays 20%. BTW, I know Sinema was the Wall Street shill that blocked it. I was asking more about how we, as a nation, would even allow it. It’s shocking how something like that ever became part of the tax system.
If people are rotating out of stocks and buying bonds, the yield would decrease. My point is that there are a lot more issues than just rates.
I have always been middle class and now at a later stage of my life have more money than I ever need.
I would rather be middle class than poor no matter how much the government provides.
My main accounts I am currently 100% cash. In those accounts which I moved to cash in Feb 2022 , I have done some swing trades made a few bucks then take profits. This small account was given to me through my first aid squads LOSAP program, since it is not qualified money you cannot roll it over into an IRA account. In fact, it is an annuity. I decided that I was just going to "set it and forget it" so I invested it very aggressively and will watch what it does. So far the Biden administration sucks balls on the economy and the markets. Don't think things are going to change until the american people get rid of this moron.
I am still wondering what those policies are and why they had a bigger impact than worldwide inflation and rising interest rates
?
I’m not a Biden fan but the current state of the economy here and worldwide is much more complicated than just laying it at the feet of this administration. Stimulus checks started before Biden and should have stopped before Biden. Raising interest rates by the Fed should have started before Biden. The inflation reduction/green plan doesn’t start until 2025 so that is not currently a factor of the state of the economy. All this without mentioning COVID, Ukraine, supply chain, China and nothing would be substantially different whichever party was in office. I do agree that we should increase oil production in the near term but that too, would not have brought instant relief.
In short, no political initiatives by this administration, whether you agree with his policies or not, have significantly impacted what is going on economically here or worldwide.
In short, no political initiatives by this administration, whether you agree with his policies or not, have significantly impacted what is going on economically here or worldwide.
Biden was elected in Nov 2020 and began his presidency in Jan 2021. So you stayed in equities for more than one year, after his election. Why, if you knew he would take down the economy and the markets? Why not just cash out in late Nov '20? Also, that small account would allow you to move to cash, right?
That has not been my experience. My wife and I have invested in very aggressive funds (although not because of my choice). Even though there has been significant decrease in value this year, it has not been down to 2016 level. You may want to check and make sure your broker isn't charging you an exorbitant fee.
Did you invest in DWAC at $175 thinking that Trump was going to make it into a $1T company? Maybe that's where all your money disappeared. Don't be too eager to blame other people for your mistakes. Would you consider a decrease in DWAC from $175 to ~$22 in under a year Biden or Trump's fault?
BrotherSkinny is a broker or a customer service rep, one or the other based upon his posting a couple of years ago.
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Q & A with Arne Alsin - President Worm Capital
Arne talks about the current market and specifically Tesla and Spotify.
Arne Alsin Q & A
Arne talks about the current market and specifically Tesla and Spotify.
Arne Alsin Q & A
Not true based on the facts of the last 5-6 rate hike cycles. Look up the data.
Mostly lazy. I posted the link a few times. Maybe I will look for it later. One recent example.....rates were going up in lock step late 2016 and thru 2017. The market was up HUGE during this time, led by tech.
But those rates were abnormally low on a historical basis so it still made sense to invest in stocks.
I think if you see rates at 5% or more the correlation is more obvious
You may be right or wrong, not sure. However, it's clear proof that stocks don't always go down when rates go up.
Look at this insanity in German PPI:
Producer prices of industrial products increased by 45.8% on the same month last year, the Federal Statistical Office reported on Tuesday. Compared to July 2022, prices rose 7.9%, it added.
Producer prices of industrial products increased by 45.8% on the same month last year, the Federal Statistical Office reported on Tuesday. Compared to July 2022, prices rose 7.9%, it added.
Stuff like this is why I’m still sitting on a bunch of cash. Energy/inflation crisis could be next COVID like stock market drop. I still think we are going to retest lows before starting recovery prob middle to end of next year.
It is also why I continue to DCA. I am not confident I can buy at the bottom with any certainty so I keep buying. It helps that I have a very long term horizon for when I will use the money
Cramer should have a disclaimer he’s assuming everyone is a retail investor with a minimum ten year holding period. He’s buying treasuries right now though and rates are still moving higher today.
I started buying some today even though the announcement is tomorrow. Most at 52 week low quality stocks and small quantity 15-25 shares, V, PRU,EMR, BDX, and VFC. Waiting for tomorrow hoping for a real drop in stocks prices to go on sale, break the June low and to see the Treasury yields. I can then determine the allocation of Treasuries and stocks.
Of course I can move to cash at anytime in any of my accounts. Right now I am 100% cash in my main accounts. If I see an opportunity to make a quick trade I will. But the market and economy sucks right now so I will wait until I think the market has bottomed.
with this small account the money was given to me by the local municipality. Unfortunately anytime you get involved with the government, even when they give you money there is unnecessary complication. It is hard to get the money out and trading is cumbersome. So since it such a small amount of money I just decided to let ride in mostly aggressive funds. Also it keeps reminding me exactly how badly the Biden administration sucks ***.
Big round of buying for me today (delayed from my normal Friday purchases). If we hit new lows, I will back up the truck, including with my leveraged ETFs.
I have been quiet lately, but couldn’t resist:
You must be running out of trucks…..as you have identified numerous buying opportunities dating back to January.
Eventually, you’ll be right…. And I hope you are right this time……my retirement date is next Friday, and at this rate, we could hit a new low by then.
Short term treasuries are not a bad deal to park some cash. We have not bottomed out.
Bulls are more frequently right than bears! Words to live by. Keep buying and you will always win in the end. Did this in 2008/2009, 2018, and 2020 and it worked out perfectly. Just gotta be patient and not become a chicken little.
Still up nicely on my early June buying.