Economy
Related: About this forumDOW is up 610 points ? Why??
Does the DOW know covid-19 is going to get worse as the shutdown is dismantled?
wryter2000
(46,036 posts)If I had bunches of money, I'd be buying stock in good companies. I might have to hold onto them, but they'd come roaring back. The market will probably have a good rally when Joe Biden is elected.
empedocles
(15,751 posts)Earliest point we COULD reach January 2020 economy will be in 2022.
wryter2000
(46,036 posts)But that doesn't seem overly long to have to hold onto a stock.
at140
(6,110 posts)not year or year and a half.
But covid-19 is so new and such an unknown, people are willing to gamble both ways.
at140
(6,110 posts)I did scrounge up some cash to buy a couple of months ago.
But now stocks are already too high.
The virus is not going to disappear.
2nd quarter corporate profits are going to be record low.
wryter2000
(46,036 posts)But if they were cheaper months ago, why is the market lower?
pnwest
(3,266 posts)with that vaccine that could be ready as soon as September
Bernardo de La Paz
(48,988 posts)lapfog_1
(29,199 posts)coupled with rendesivir large study showing promising results (30% drop in lenght of illness and 25% drop in mortality).
lark
(23,091 posts)dlk
(11,549 posts)Emotions are all over the map due to the COVID-19 pandemic. The Dow will likely be on a rollercoaster for awhile.
Tech
(1,770 posts)Frasier Balzov
(2,643 posts)A brief respite from the collapse will allow that to occur.
Shemp Howard
(889 posts)Bank CDs are paying around 0.10%. A good money market fund might be paying around 0.50%. So if you want to invest for the future, youve got to put your money into stocks. There is simply no where else to go.
But if bank CDs were paying around 6%, things would be very different in the stock market.
Thats my amateur view, anyway.
at140
(6,110 posts)The artificially low interest rates created by FED by printing Trillions of "electronic" money,
is the real reason stock markets and other hard assets such as housing are in a bubble.
empedocles
(15,751 posts)said he was not interested on a 'return on investment' . . . Will was interested in the 'return of HIS investment'.
[This may be a time to minimize losses, rather than risk, what could be a very risky bet on 'gains'].
progree
(10,901 posts)have the best rates, because it has brick and mortar branches, has rates of (APY)
91 day: 0.60%
1y: 1.10%
2y: 1.35%
4y: 1.65%
5y: 1.90%.
Also check out bankrate.com
2y: 1.75%
4y: 1.75%
5y: 1.80%
(I'm shocked that bankrate.com doesn't have much better rates than my credit union, it usually does).
Here's another showing 1y, 3y, and 5y for 10 banks in a table for easier comparison:
https://www.nerdwallet.com/best/banking/cd-rates
However, I entirely agree with your point that there's nowhere to go. These are miserable rates (the yield on the S&P 500 is better for example, and stock dividends rise over time rather than being fixed, and of course the endless historic record of stock capital gains). But I post this just because I don't want people to overlook FDIC- or NCUA-insured CD's for the part of their portfolio they feel should be in fixed income.
There are some who post about high P/E's and Shiller's CAPE ratio and Warren Buffett's market valuation / GDP ratio, both showing stocks considerably overvalued in aggregate compared to almost all of the past, but in my mind, leave out one crucial factor -- the one you mention -- rates on competing fixed income investments like bonds and CD's are about the lowest they've ever been. And just plain suck.
mn9driver
(4,423 posts)We will see the Market move up and down quite a bit as these things play out. Over the longer term, stocks will *probably* remain lower than their December-January highs due to ongoing economic bad news as a result of the long term disruption this has already caused.
Voltaire2
(13,009 posts)and there is a general consensus that the peasants should go back to work and just get used to dying more often.
Warpy
(111,245 posts)which leaves the 99% jobless, uninsured, and ill. The market loves that kind of news.
Reality is likely to set in soon as orders drop and the cash flow goes with them.
BillyBobBrilliant
(805 posts)being indicative of a good economy is bullshit being perpetrated by the capitalists.
The reality is, a high valued stock market is an indication of how much advantage the corporations are taking of the workers.
i.e. how much upward movement that the money supply makes from the average person to the wealthy.
duforsure
(11,885 posts)It's all fake, and it will crash on them anyway. They failed getting enough directly to the people in time, and this will take years to restore the economy from their failures.
xyoungblood
(36 posts)is printing money and giving it to its banks to purchase securities (stock). It's their way of stopping the economy from siding all the way into a Depression and bankrupting them. They will probably have 6 TRILLION in the stock market by the end of the year. And remember they are a private corporation who controls the banks and our paper money supply.
They are also fighting to keep Trump in this election. He will use the inflated stock market as a prop for his false economy.
Now, no matter who gets elected president. The Federal Reserve will hold the global economy hostage because they own so much stock they can order government leaders to do their corporate bidding under threat of issuing a Sell Order on all of their stock, crushing our economy which will topple economies all over the world.
The head of Black Rock (a massive fund) said investing is dead. From now on just put your money wherever the Fed decides to invest. It's pointless to invest when the entire market is now manipulated and controlled by one corporation.
at140
(6,110 posts)WTF our elected politicians not waking up and reform the crazy system?
If they wait longer, it is going to be too late.
progree
(10,901 posts)I know they are buying a lot of bonds... including corporate bonds ... and yes, that boosts stocks by pushing interest rates down even more and providing liquidity for dubious quality bonds... but I haven't heard of the Fed buying up stocks. Yet.
Forbes, April 21
https://www.fool.com/investing/2020/04/21/why-is-the-stock-market-up-when-the-economy-is-tan.aspx