S & P 500

[Darts]

is almost at a record high. No doubt this is bad news for the liberals because it means the former rich are becoming rich again.

S&P 500 falls short of new record high

The S&P 500 is so close to a new record high -- its first since the pandemic hit and exceeding its all-time high from February. The stock index fell short of a new peak on Tuesday, but it remains just an arm's length away.

www.cnn.com

 

[luvyeah]

 

[malata]

me buys so much stocks near the bottom from a to y, it's making jay z feeling lonesome

 

[Darts]

The market is forward looking, so it is looking beyond the pandemic.

Looks like a "V" market, quick deep down and sharp quick up.

 

[Zipperpants]

Well they are stopping government assistance next month so there might be a dip next month as there will be hundreds of people who can’t pay their rent or mortgage .

 

[Darts]

S & P 500 closed at a record high yesterday.

 

[Nesbot]

S & P 500 closed at a record high yesterday.

I admittedly dont know how this works. But how is this possible? Most of the world is in complete turmoil. The border won't be open to Canada/US traffic until at least September. Unrest in multiple countries not even related to Covid. Where is the positive outlook coming from? Seems fishy to me.

 

[Darts]

I admittedly dont know how this works. But how is this possible? Most of the world is in complete turmoil. The border won't be open to Canada/US traffic until at least September. Unrest in multiple countries not even related to Covid. Where is the positive outlook coming from? Seems fishy to me.

With interest rate at 0 the only viable investments are stocks, gold and real estate. Also, technology stocks, Facebook, Apple, Amazon and Netflix are on fire.

 

[Nesbot]

Precious metals I understand. They are stable. Tech...hit or miss but the big ones you listed are a sure thing. Real estate and stocks? I don't get it. Every single business sector is either in free fall or has major uncertainty. How then is the stock market showing such positive gains? The US still can't even agree on the next stimulus check and speculators think this is a positive sign for spending?

My theory is this is all smoke and mirrors. Its an extremely lagging indicator and a few months from now things will reflect the reality. But again, I am not even a novice in this game, I'm a nothing.

 

[decoy2673]

Because the stock market is not the economy. Dont over complicate it. Its a place to put your money to get a return on your investment. The safest place to put your money now is in assets like stocks. if you keep it in cash you are losing buying power due to possibly intense inflation. so in a sense you dont have a choice but to dump your money in the market.

 

[bigshot]

Because the stock market is not the economy. Dont over complicate it. Its a place to put your money to get a return on your investment. The safest place to put your money now is in assets like stocks. if you keep it in cash you are losing buying power due to possibly intense inflation. so in a sense you dont have a choice but to dump your money in the market.

Correct. The market is not the economy. There are still some very attractive growth stocks (tech & utilities) and numerous stocks that pay attractive dividends in a low interest environment. With these "lower for longer" rates, big corporations can borrow money at dirt cheap rates which helps boost growth initiatives as well as the bottom line...

 

[fall]

numerous stocks that pay attractive dividends

So, what is your take on Modigliani and Miller theorem?

 

[bigshot]

So, what is your take on Modigliani and Miller theorem?

Well, it doesn't take much to understand that in a low interest environment, you will end up having less money than your initial investment when accounting for inflation. Stocks that pay an attractive dividend are the last place to hide. Please feel free to share your thoughts on Modigliani and Miller theorem if you're compelled to do so...

 

[fall]

Well, it doesn't take much to understand that in a low interest environment, you will end up having less money than your initial investment when accounting for inflation. Stocks that pay an attractive dividend are the last place to hide. Please feel free to share your thoughts on Modigliani and Miller theorem if you're compelled to do so...

Sorry, still have no idea about the relevance of dividend yield. Theorems do not need any thoughts - they are the the proofs of the results based on assumptions . We can argue about the validity of assumptions, such as taxes, imperfect information, and transaction costs, but inflation and interest rates have nothing to do with the "irrelevance of dividends" result. Choice of low vs. high dividend paying stocks should be influenced mostly by your current and future tax brackets.

 

[Knuckle Ball]

S & P 500 closed at a record high yesterday.

It’s interesting to watch what’s going on with the stock market. These gains don’t seem to align with the average citizen’s economic wellbeing. The wealthy keep getting wealthier while the average person is struggling.

 

[Darts]

The feds are printing money like there is no tomorrow so some of that money is finding its way into the stock market and real estate.

 

[Knuckle Ball]

The feds are printing money like there is no tomorrow so some of that money is finding its way into the stock market and real estate.

Is this not a sure fire way to trigger hyper-inflation like they had in Depression-era Germany?

This cannot possibly be sustainable?

 

[Darts]

Is this not a sure fire way to trigger hyper-inflation like the had in Depression-era Germany?

This cannot possibly be sustainable?

Yes, hyper-inflation. A more recent example is when the U.S. financed the Vietnam war by printing money instead of raising taxes. I think inflation was in the double digits when Reagan took office. Paul Volker raised interest rates to almost 20% to kill inflation.

 

[WULA]

There is so much government debt (corp and personal too) that the only way to pay it off is by inflation, likely stagflation. A decade at 10% would help make the govt debt somewhat more sustainable.

The only other route is to bring gold back into the monetary system.

 

[fall]

There is so much government debt (corp and personal too) that the only way to pay it off is by inflation, likely stagflation. A decade at 10% would help make the govt debt somewhat more sustainable.

The only other route is to bring gold back into the monetary system.

A simple default of the government on its debt obligations to central bank will do too.