This is Insanity. Dow nears 32,000. Can someone please explain this to me? (small business, financial)
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Yeah I can explain. America's wealth falls into one of two baskets. One wealth sector is the potential productivity of eager workers. The other is the stored wealth that has already been converted into negotiable assets, most in the form of shares. In other words, everyone's share of the wealth is either sleeves rolled up, or a huge portfolio.
Guess which group controls the economy. Workers lose their jobs, homes, families. Wealth-owners see the Nasdaq (hence their wealth) double in a year.
But nobody calls it what it is -- Profiteering.
I see you never passed a course in economics at the University level. You managed to get 100% wrong. That's quite an accomplishment.
Don't feel bad about yourself; Economics isn't for everyone. Why don't you start with some free courses at Khan Academy? You won't even need mastery of Calculus, although you'll need it if you want to understand some more advanced economics.
For the most part people who have done well investing are rarely going to be those complaining about the fed.
They are usually not those looking to point a finger at everyone but themselves for doing poorly or not as well as they should have financially.
They are usually not the people who paint everything as the rich vs the poor.
They are usually not the people harping on conspiracy theories.
They are usually not the people who didn’t listen when the fed did everything but drop leaflets from helicopters saying don’t count on banks for your interest ...
Oh and let’s not forget using the words PLAYING THE STOCK MARKET and GAMBLING
I just turned on the TV and the Dow is up nearly 500 points since this morning and is at 31,995 as I post this.
This is total insanity. There is NOTHING to support these prices that I can see or understand - other than just outright massive gambling and speculation. It's like the entire economy has become some sort of BitCoin ponzi scheme.
What ever happened to fundamentals? Like building stuff, tangible assets and real property? Everything exists in the ether somewhere and it is out of control. Billion dollar companies that really only consist of a bunch of obsolete computer banks and rented office space, and if they were parted out wouldn't bring 500 bucks at a garage sale.
How can this not be a massive bubble with the Dow going up a thousand points every few weeks, with no end in sight?
Am I just totally out of touch - or are we about to experience a crash of epic proportions when reality catches up to the oligarchs?
I just don't understand - can someone educate me how this can just keep going up and up and up - when nobody is buying anything and companies of all sizes are barely hanging on and that only by the grace of massive stimulus and unrestrained printing of money.
Does everyone just think the music will never end? That's what they thought in 2007...
You should remain in cash, while the rest of us enjoy the ride! I'm mostly sticking to quality high dividend paying companies, and car companies going into EVs in a big way. Snooze, you lose!
Keeping cash under the mattress, or in the bank, is a losing proposition, especially when inflation rises.
Buy quality, blue chip dividend-paying stocks, and you'll be fine! A prime example of what I'm talking about is AT&T stock (T), which currently pays a 7% annual dividend. Also 7% for Lumen Technologies (LUMN). I'm not a broker. Fair disclosure: I own some of both.
Interest rates remain low. Where else are you going to invest? Certainly not money market and CDs...
*Bingo*!
Everyone is chasing yields....
For a decade or longer now interest rates have been low to negative, you might as well put your money under a mattress instead of any sort of savings vehicle.
There is a a sh** ton of money out there from both personal and other investor side looking for some place to go. T-Bill and bond market isn't that great either in terms of returns, so again where are people going to make some money?
Also many people pulled out of the market when stuff hit fan back in early 2000's which began great recession. Good number didn't get back in until after boom was well underway so now are trying to recoup lost time/money and rebuild lost wealth.
All this being said nearly everyone knows the market is over valued at this point. Few listings support anywhere near current valuations, and everyone also knows things could go *boom* any minute. But for now it's the only game in town so plenty are riding the wave.
That and the Fed creating huge amounts of new money, while Trump and Biden put that money into the economy. That does several things to encourage stocks to inflate. First a lot of the money goes to people most apt to spend it, increasing commerce right away. And then that new money trickles up to the more wealthy, who tend to invest in the markets. Increasing demand there.
With the Pandemic soon to wind down, IMO stocks have a favorable short/medium term future.
Creating huge amounts of money, and giving it to people to spend, cannot do anything to improve the economy. Money is just a convenience for making it easier to trade. When you create and give out money, are you doing anything at all to make it easier for people to get what they need or want? No.
If someone gives me a million dollars, that helps me get what I want and need, and helps those I buy stuff from. But that million dollars was not created from thin air, it was a functioning part of the whole economic system.
If every American is given a million dollars, and all that money was created from nothing, do you really think the economic system will benefit?
Furthermore, when Trump and Biden put that created money into the economy, most of it went to huge banks and corporations. It did not help the middle class. But, as I said, even if most of it were handed out the middle class, it would not help the economic system at all.
I like that fund a lot. Also the vanguard total stock index is a good one as well. If you are worried about the market just put your money in an index and not worry about it. If your money is in a mattress it’s not earning anything...it should at least be matching inflation.
If your money is in a mattress it won't evaporate over night if the stock market crashes.
If your money is in a mattress it won't evaporate over night if the stock market crashes.
Right. Just hope your house doesn't burn down.
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