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Start with the idea that the talking heads are idiots...they have proven that time after time. Next realize that the casual investors are even dumber if that is possible. There are still huge numbers of people who moved their 401k investments to bonds. They missed the growth in the stock market and since last Spring they also took big hits on the value of their bond funds. If you are heavily invested in the stock market, it might be time to consider slowly rebalancing and selling. If you are modestly invested, who knows. It does seem that there is a lot of room for continued growth. If you pulled your investments out of the stock market years ago and never returned, well sorry, you overslept. Now might not be a great time to finally wake up.
I don't know if it will crash but I do think the time for getting in and making big gains is likely over. The time to do that was 2 or 3 years ago. The Shiller P/E ratio, one of the best predictors in the long run has gone back up way above it's historical average of 16 and is now just under 25. Not a good sign for getting in.
Words like "crash" and "collapse" are meaningless sensationalism, unless you put workable numbers on them.
Anyway, the next best chance for a general decline in equity prices is during the next round of budget/debt (fiscal policy) negotiations in January-February. Some committee is supposed to report in December, but as in the past it will most likely be a dud, but government funding ends sometime in January and the debt ceiling in February.
At the least, that will cause some volatility, but chances are that they will continue to kick the can down the road for another 10 months or so, so it is hard to say what direction the Jan-Feb volatility will wind up going.
Words like "crash" and "collapse" are meaningless sensationalism, unless you put workable numbers on them.
Anyway, the next best chance for a general decline in equity prices is during the next round of budget/debt (fiscal policy) negotiations in January-February. Some committee is supposed to report in December, but as in the past it will most likely be a dud, but government funding ends sometime in January and the debt ceiling in February.
At the least, that will cause some volatility, but chances are that they will continue to kick the can down the road for another 10 months or so, so it is hard to say what direction the Jan-Feb volatility will wind up going.
Agree, the recurrent Washington circus regarding the debt ceiling is the perfect excuse for some dumping and portfolio reorganization.
The funniest/saddest part of all is that, this has happened so many times now that even a potential DEFAULT OF THE FREAKIN' UNITED STATES OF AMERICA doesn't really spook markets anymore, it's all like "yeah yeah, okay".
When they do taper -I don't know when but it will happen- can I say I told you so?
Please?
Sure but do not hold your breath. If they pulled a fake and said they would "taper" the market correction would justify further money creation. Either way it means the taper will be to get the money supply wider, not print less.
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