Where is the stock market headed?
The stock market has been on the up and up and it's only a matter of time before a bear market hits. Indicators prominently illustrated a pullback occurring back in 2014, but artificial inflation has since manipulated the market higher and higher. Large companies have used a tactic known as stock buybacks to inflate stock prices, and this trend has led stock indexes to reach ATHs. Recently, there have been some indications of a major pullback with the global economy slowing, trade wars scaring investors out of the market, and consumers spending less money due to inflated costs. Economic indicators such as the inverted yield curve are suggesting otherwise however.
The inverted yield curve is a metric that measures comparisons between long and short term interest rates. When long-term debt interest rates fall below short-term debt interest rates, then a recession is in the near future. This metric has predicted the previous 7 bear markets, but the curve is not yet showing a recession is to come, at least for yet another few years. Historically, when the spread drops below 0, a financial recession is set to follow. The current inverted yield curve isn't suggesting this, but there are plenty of factors scaring investors out of the market. The market is up, but there are a lot of solid, high paying dividend stocks that could be bought for very cheap right now. Are you investing your money in the stock market now, waiting for prices to substantially fall before buying in, pulling out before prices plummet, or some other tactic?
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I think the government and agencies will find a way to prop up the economy and market; probably via stimulus. They will need to do so for the incoming election. However, the more they do the worst the recession will be as the tools designed will be less impactful to help in the future!
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Yes it will again be due to artificial mechanisms, and you are right. Once the recession does hit, it will be worse than ever thought expected due to unregulated governmental and agency wide intervention
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Not financial advice and all that, but I’d be very leery about putting money into most equities right now. I’ve been tempted to move my IRA funds into cash/short-term Treasuries but still have it in precious metals mining stocks and GBTC (yeah, some risk there).
The inverted yield curve, mountains of debt everywhere, weakening economies in Europe in general and Germany in particular, Trump’s idiotic trade war. And all of Switzerland’s sovereign debt now has negative yields. That can’t possibly be a good sign.
Too much gasoline out there, just waiting for a match.
Yeah it’s a sticky situation most everywhere at the moment. I’m not too worried about my IRA since I’m still so young, but for those that may be nearing retirement, surely presents a more scary situation.
I just hope there is enough fire retardant to combat the flames once the match is lit ...
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In the near future, the markets will fluctuate.
It's odd because interest rates are already low, keeping official inflation rates down. There won't be much room for the feds to play if things do turn for the worst. There isn't much precedent about what happens if there is a downturn while interest rates are near record lows. The only option I see is to keep on printing a ton of money. This charade can't keep up forever, diversify into inflation-proof assets and defensive stocks. The high level of debt is very telling of what comes next.
Absolutely. Hopefully the revelation occurs and the opportunity crypto presents for paying back colossal amounts of debt is realized. This could be a huge up and up for the cryptosphwre as a whole, but especially for the few tokens that become adopted for use
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