why market still so high when so many bad news?

[Sauron]

If one person just based on bad news and short the market, then one gotta pay the high price ? What bad news ?

Don't fight the Fed

 

[Toni90]

Stock is good one. Economy good then rising. Economy bad they cut rate then rising again. Just buy stock. Don’t think. Don’t argue. Don’t be stupid. Just buy.

 

[Trader11]

As a longer term and active investor, you just need to prepare for both directions.

Time in market is better than timing the market (TIMIBTTM).....

 

[revhappy]

Danish banks are offering negative rate mortgages and Austrian 100 yr bonds are trading at 0.5%. Yeah, all is well. This logic that since bonds are offering so low rates so we must get into equities, is the most flawed logic to me. There is a reason why bond yields so low and the reason is not good news.

 

[roflolmao]

Buying stocks nao!

Buy no scare, scare no buy
Be greedy when others are fearful
Time in the market, beats timing the market
Dollar cost averaging
Fundamentals have not changed
Equity will always go up if you hold for the long term
Buy the dip
The more you wait, the higher your opportunity cost

 

[BBCWatcher]

Danish banks are offering negative rate mortgages and Austrian 100 yr bonds are trading at 0.5%. Yeah, all is well.

Do you live in Austria or Denmark -- or for that matter in Afghanistan or Syria? There are always countries in "weird" situations.

Japanese long government bonds have been yielding virtually nothing (zero, decimal point, whatever) for decades, and that's the world's third largest national economy. So what?

This logic that since bonds are offering so low rates so we must get into equities, is the most flawed logic to me. There is a reason why bond yields so low and the reason is not good news.

So you recommend Austrian government bonds then?

Look, you've got to do something with your savings, if you're saving.

 

[revhappy]

Look, you've got to do something with your savings, if you're saving.

Someone is buying those negative yielding bonds. Why are they not doing anything with their savings? The amount of money in the bond universe is much larger than the amount of money in the stock universe, so there is much more skin in the game for bond guys than the stocks guys, so who is more right?

 

[ronronleelee]

What bad news?

Fifo opportunities.

Agree one haha walau always bad news anyways

 

[Dividends Warrior]

Someone is buying those negative yielding bonds. Why are they not doing anything with their savings?

One of life's greatest mysteries. Hahaha!

 

[Trader11]

Someone is buying those negative yielding bonds. Why are they not doing anything with their savings? The amount of money in the bond universe is much larger than the amount of money in the stock universe, so there is much more skin in the game for bond guys than the stocks guys, so who is more right?

What if they are paid to buy negative yield bonds?

 

[peacefulday]

Its totally immobilized many investing. The long become longer x2 or long forever. PC75 were you got caught? If history repeats I will choose take cover.

In 2008, it was panic mode. Fed bailed out AIG, otherwise, all the banks will go under.

2014 hindsight. This guy over simplified. Home flippers bought homes with zero money down hoping to cash in the near future. In the game of musical chair, the music stopped with no chair left.

 

[Dividends Warrior]

Didn't have this view before. And was on the thinking that baby boomers retiring will plug out their money from the stock markets. However I think u are right. People are living longer and bonds no longer provide safety. If they only invest in bonds it's even higher risk.

Yup, in the past I also thought retirees just rebalance their portfolios by divesting stocks and buying more bonds. Then i realised now is a different era. Long-term bonds dun yield 4-5% anymore (maybe never again)
But another retirement strategy is still relevant now. Downgrading into a smaller flat. Pretty common in developed nations where the baby boomers enjoyed exponential growth in their home values.

 

[Lasogette]

Yup, in the past I also thought retirees just rebalance their portfolios by divesting stocks and buying more bonds. Then i realised now is a different era. Long-term bonds dun yield 4-5% anymore (maybe never again)
But another retirement strategy is still relevant now. Downgrading into a smaller flat. Pretty common in developed nations where the baby boomers enjoyed exponential growth in their home values.

This move seemed not replicatable in our gen if we spend most of our cpf on a 500k 5 room bto flat. Do share more insights if you have any.

 

[peterchan75]

Its totally immobilized many investing. The long become longer x2 or long forever. PC75 were you got caught? If history repeats I will choose take cover.

I was totally fearless. My holding at that time was PFE, HP, LZ(Lubrizol), AMD, CCE etc. Couldn't log on to my TD Ameritrade account when they banned short on Financial stocks.

 

[Dividends Warrior]

This move seemed not replicatable in our gen if we spend most of our cpf on a 500k 5 room bto flat. Do share more insights if you have any.

Yup, returns have diminished for our gen. That $500k flat can never be sold at $5mil when we retire. Maybe $1mil is possible, still not bad actually. Or you can decouple from ur wife and buy a 2nd property to rent out.
Our gen has to support our retirement income with stock/reit dividends, no choice. Fixed deposits and bonds are just not viable.

 

[Mecisteus]

Look, you've got to do something with your savings, if you're saving.

Yeah that something has to be hold cash, bonds or equities (properties, shares).

Just pick and allocate accordingly.

If bonds are so low yielding, then you got to choose the other options.

If equities are so expensive, then you only got the cash option.

 

[Shiny Things]

Someone is buying those negative yielding bonds. Why are they not doing anything with their savings?

I don’t see the problem. If leaving euros in the bank yielded 5%, you’d buy a bond that yielded 6% because you’re willing to trade off a long-term investment for a higher yield.

In the same way: if leaving euros in the bank yielded negative half a percent, then of course you’d rather own the Austria 2068s yielding positive 0.75% (as long as you’re comfortable with a long investment horizon). It’s an extra 1.25% yield!

Honestly I’m coming around to Joe Weisenthal’s point of view: when it comes to interest rates, zero is just another number.

 

[hindsight]

I don’t see the problem. If leaving euros in the bank yielded 5%, you’d buy a bond that yielded 6% because you’re willing to trade off a long-term investment for a higher yield.

In the same way: if leaving euros in the bank yielded negative half a percent, then of course you’d rather own the Austria 2068s yielding positive 0.75% (as long as you’re comfortable with a long investment horizon). It’s an extra 1.25% yield!

Honestly I’m coming around to Joe Weisenthal’s point of view: when it comes to interest rates, zero is just another number.

Rev's talking about negative yielding bonds (of which theres a whopping 15T of it floating around now), not the ones with positive yields. This is obviously a bubble, nobody is buying those bonds for the coupons since the effective yield is negative, they are buying them because they think central banks will buy it from them at an even higher price, its the classic greater fool game.

Zero is not just another number when it comes to interest rates, monetary policy gets progressively useless when rates fall below zero, NIRP doesn't work in the real world because savers can always choose to hold cash and not leave their money in the bank (which is why European banks have not been able to pass on negative rates to its depositors so far). It doesn't stimulate lending or investment, all it does is generate higher asset prices because all asset prices are marked to the risk-free rate.

 

[Mecisteus]

Rev's talking about negative yielding bonds (of which theres a whopping 15T of it floating around now), not the ones with positive yields. This is obviously a bubble, nobody is buying those bonds for the coupons since the effective yield is negative, they are buying them because they think central banks will buy it from them at an even higher price, its the classic greater fool game.

Zero is not just another number when it comes to interest rates, monetary policy gets progressively useless when rates fall below zero, NIRP doesn't work in the real world because savers can always choose to hold cash and not leave their money in the bank (which is why European banks have not been able to pass on negative rates to its depositors so far). It doesn't stimulate lending or investment, all it does is generate higher asset prices because all asset prices are marked to the risk-free rate.

That is the not the real reason why people are buying negative yielding bonds.

When you purchase a bond, you will be knowing the yield from the onset. You will not be getting any higher returns than the yield upon maturity or redemption.

These are the simple reasons.

https://qz.com/1647791/12-trillion-of-negative-yielding-bonds-are-a-distress-signal/

Asset bubble?

European stocks are already pricing a slowdown in the global economy. Their PE ratio are less than 20 now. Their stocks are not in bubble.

It looks more like a bond bubble to me because everyone is flocking into treasuries, pushing bond prices to sky rocket and yields to go more negative.

So yes. Zero or negative is just another number. You select a number that is positive or less negative for your investments.

 

[FrostWurm]

Zero is not just another number when it comes to interest rates, monetary policy gets progressively useless when rates fall below zero, NIRP doesn't work in the real world because savers can always choose to hold cash and not leave their money in the bank (which is why European banks have not been able to pass on negative rates to its depositors so far). It doesn't stimulate lending or investment, all it does is generate higher asset prices because all asset prices are marked to the risk-free rate.

Yes I agree with this and I'm in the very small minority.

Hypothesis is that interest rates, even in the mighty US of A, will eventually converge to zero and hover slightly above or below the zero line. Monetary policy will become wholly ineffective. But of course, this is only in the long-term. Please tell me I'm wrong