Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 08-10-2017, 05:47 AM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,179
Quote:
Originally Posted by walkinwood View Post
I googled Market is really different this time and was surprised by the number of links saying the same thing
https://www.google.com/search?q=the+...rent+this+time
Herd mentality? or are they ahead of their time?
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-10-2017, 07:21 AM   #22
Recycles dryer sheets
 
Join Date: Jan 2014
Posts: 70
Just my two cents on this issue........

I think the recent increase (over the last few years) in stock prices and PE Ratios and trading volumes is directly related to the recently (in the last few years) implemented laws/regulations that allow employers to "automatically enroll" employees into a 401k. Soon after that was done, the concept of "automatically" increasing the employee's contribution percentage was introduced. In only a few years you had millions upon millions of "new investors". Most of these people are just "plowing money" into their accounts. Most of them pick their funds by the "fund name". e.g. Blue Chip, Value Growth, Retirement 20XX, etc, ad nauseam!?!?

In addition to those two changes, the early wave of the boomers is now turning 70.5 and RMD's are being forced out of the system. In a lot of cases, the boomers do not really need the money, and so they place it back into the market at whatever price is current in the market.

The total of individuals (and their money) in these three categories is enormous, and, in most cases, none of them are trying to place a "value" on the market price of the stocks/bonds they are buying.

There are very few "market makers" left to value and set the market price for most stocks. I believe this current condition will persist for at least the next 10 or 20 years. At that point, the "new kids" who were auto-enrolled will start asking questions regarding their retirement years. I do not think they are going to like the answers.

For now, and the next few years, there will be a constant upward slant to the value of the overall market.

I am probably wrong, but, for now, this is my two cent view of the market.
__________________

__________________
DatumPoint5 is offline   Reply With Quote
Old 08-10-2017, 09:11 AM   #23
Confused about dryer sheets
 
Join Date: Apr 2015
Posts: 6
Quote:
Originally Posted by Scrapr View Post
Huh...I tried 2 different browsers and got locked out. Probably my cookies


I got locked out too, but I was able to get to it by searching using the text of the title in FB and the reading it from there. (I didnít know about the blog post at the time.)
__________________
KarenC is offline   Reply With Quote
Old 08-10-2017, 10:25 AM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,920
Quote:
Originally Posted by Scuba View Post
Yes, as long as markets have existed there have been "experts" saying "it's different this time." Hasn't turned out to be true.
Quote:
Originally Posted by haha View Post
You must be kidding, Every time is different. While some instances follow a common script, many do not.

I believe that markets will move toward the mean, it is not possible to know for sure, or when.

Ha
Of course the specific details are different each time, but the outcome is what has never really changed yet. The market will always overreact up and down, and 'move toward the mean though it's impossible to know when or what will trigger the inevitable big shifts.' That's what I've always taken 'it's never really different to mean.' Even when there seem to be obvious indicators, the market can stay up, or down, beyond all reason for quite a while (years). There are gurus every cycle who get it right, and others who get it wrong, or their timing is way off - and few if any are right all the time. But you know all that...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 08-10-2017, 03:37 PM   #25
Recycles dryer sheets
 
Join Date: Dec 2016
Location: Encinitas
Posts: 133
ETFs?
__________________
Starsky is offline   Reply With Quote
Old 08-10-2017, 03:54 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,552
Full employment and people contributing automatically to their company retirement plans (401(k), 403(b), 457) is helpful.

All the trucks/vans of service and tradespeople going through the neighborhood have "Help Wanted" signs on them as do all the retail shops and restaurants that I have seen in my area and in my travels.
__________________
LOL! is offline   Reply With Quote
Old 08-10-2017, 04:52 PM   #27
Thinks s/he gets paid by the post
jollystomper's Avatar
 
Join Date: Apr 2012
Posts: 1,330
Quote:
Originally Posted by LOL! View Post
Full employment and people contributing automatically to their company retirement plans (401(k), 403(b), 457) is helpful.

All the trucks/vans of service and tradespeople going through the neighborhood have "Help Wanted" signs on them as do all the retail shops and restaurants that I have seen in my area and in my travels.
The problem is, the majority of those jobs may not be full time, pay minimum wage or barely above, and come with no benefits. It is tough to fund retirement with that type of job. I am not saying folks should expect to be "entitled" to their hearts desire... but I always ask myself why no one reports the details of the types of jobs available, or that are being created.
__________________
Current target FIRE date: Under negotiation but will happen in 2017
jollystomper is offline   Reply With Quote
Old 08-10-2017, 05:05 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,552
Sure, not everyone makes 6 figures, but the median (or is it the average?) household income is in the mid-5-figures. Such income allows for contributions to IRAs, so 401(k)s and 403(b)s do not necessarily have to be offered to everyone since they could not save more in retirement plans than the legal limits for IRAs. Don't forget that if one is married, they and their spouse could contribute a combine $11K to IRAs. Can a family making $60K a year contribute $11K combined to IRAs? Many people would argue: No, they can't. Thus 401(k)s and 403(b)s do not have to available for everyone.
__________________
LOL! is offline   Reply With Quote
Old 08-10-2017, 05:56 PM   #29
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 1,150
Quote:
Originally Posted by Midpack View Post
Of course the specific details are different each time, but the outcome is what has never really changed yet. The market will always overreact up and down, and 'move toward the mean though it's impossible to know when or what will trigger the inevitable big shifts.' That's what I've always taken 'it's never really different to mean.' Even when there seem to be obvious indicators, the market can stay up, or down, beyond all reason for quite a while (years). There are gurus every cycle who get it right, and others who get it wrong, or their timing is way off - and few if any are right all the time. But you know all that...


Exactly!
__________________
Scuba is offline   Reply With Quote
Old 08-11-2017, 08:46 AM   #30
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Posts: 1,002
My guess is that there is a lot more "dumb money" now than in the past. Most of it is searching for yield, which is why the stock market has been on a tear. Money from overseas that's looking for a safe haven, a better economy meaning more people investing, an aging workforce, meaning more people trying to juice growth to meet retirement objectives, and so on. The same thing is happening in real estate. Everyone wants to "diversify" by owning rental real estate.

The dumb money, and probably much of the smart money that's trapped now, will be hurt by rising interest rates. Someday everyone will wake up and decide the real risks are upon them and they aren't being properly compensated for those risks. Controlled decline or market panic, the markets will fall accordingly.
__________________
Another Reader is offline   Reply With Quote
Old 08-11-2017, 01:21 PM   #31
Thinks s/he gets paid by the post
 
Join Date: Sep 2006
Posts: 1,677
Since 1981 US Government long term debt has continued a steady decline of interest rates after having a previous 30+ trend of rising rates leading to the 14% in 1981. It has been a consistent decline in interest rates over the past 30+ years and since 2008, led by purchases of the US government, even in the face of the US Government more than doubling the supply of US government debt to 20 trillion the last 10 years, long term rates are still at historic lows.

By Central Bank policy, interest rates have been a constant force for improvement in stock prices, eliminating the competition from bonds. Investors have come to view this as "normal" activity and the need to even consider the reasons of WHY to own a stock is now commonly viewed as foolish by the average investor in the stock market. There are plenty of individuals who do not trust the market but for the most part they are not part of the stock party.

In 1981 the US stock market capitalization was 40 percent of GDP, since then it increased steadily to 144 percent of GDP by the end of 1999. At the nadir in 2009 it came to earth at 95 % of GDP, it is now back at peak 146% of GDP. In 2009 GDP was 14.5 trillion, now it is around 18 trillion, not very much GDP bang for 10 trillion in debt spending by the government over that time.

All of the talk of the types of stock ownership and how it is acquired has had no effect on the long term performance of the stock market. If the market were to go into a prolonged stock market decline Zweig would be arguing the constant selling by target date funds is keeping the market from rallying. The simple truth is stocks are in demand because bonds are not competitive and are not being offered for sale even as their supply is swelling.

Mathematics or block chain currencies at some point will force the hand of Central Banks, and any purchases, sales due to the composition of retirement year funds will have little impact on a long term chart of stock prices once interest rates revert to the economic value they are intended to provide. Imagine for a moment what would happen to Central Bank policy if suddenly APPLE announced they were converting their 50 Billion US dollars into BITCOINS.


The effect of this low cost debt has been to subsidize debt investments in new technologies which is drastically lowering prices and preventing inflation, which is needed to offset the increase in debt.

Could the stock market get to 300% of GDP and US Government debt get to 40 trillion over the next 10 years keeping the economy on its upward path of 2-3 percent per year, all while 10 year rates slowly grind to 5 percent or whatever a true economic interest rate for the 10 year would be, doubtful...



https://www.thebalance.com/us-gdp-by-year-3305543
https://fred.stlouisfed.org/series/DDDM01USA156NWDB
__________________
Running_Man is offline   Reply With Quote
Old 08-11-2017, 01:22 PM   #32
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,026
Quote:
Originally Posted by haha View Post
Maybe so, but who is creating the excess equity demand?


Baby boomers trying to play catch up with there savings rates!
__________________

__________________
dallas27 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Stock Pickers - Jason Zweig gerntz Stock Picking and Market Strategy 53 05-22-2017 09:02 PM
Zweig Interview with Quartz Chuckanut Other topics 0 12-18-2015 10:46 AM
Hi I am Jason Gunnz Hi, I am... 3 08-05-2011 12:09 AM
Zweig's take on the current market DblDoc FIRE and Money 14 11-16-2008 04:34 PM
Property Tax Rates: Different States, Different Strokes? Orchidflower FIRE and Money 39 10-28-2007 02:41 PM

 

 
All times are GMT -6. The time now is 11:30 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.