Stock market????

Is it just me, how come in the 80s and 90s if Israel blinked, the stock market went down 20 percent. Now they bomb Syria and the the market goes up????? Interest rates are artificially held down.(anyone denies inflation, has not been shopping lately, food, cars, housing etc. is up. Paul Volcker would have interest rates at least 5 percent higher, anyone remember him? (Mr. 20 percent interest) the stock market would be much lower. I don't get it. Let alone we print money and print and print and print. I know earnings are okay, but that is all that going good for this market. Thoughts?

I definitely believe a correction is coming. When?, I dunno, my guess would be when the fed finally starts pulling back and the "real" inflation starts kicking in, and by "real" when they start figuring in the all the things that make the CPI actually start upward. I absolutely agree that the prices of everything you mentioned have gone up, I know it's a dent in our wallets here.

I've started buying a few bits of GLD here and there. I also have bought a coupla mining stocks back at the end of July (FCX and VALE) thinking they would start appreciating at some point soon and FCX took off like gangbusters for me which was pretty nice.

If/when a correction happens I have the bulk of our holdings in DRIP's, the rest I pretty much keep a daily watch on so I feel OK.If dividends start getting whacked then I'll worry. Of course all IMHO.

J

Couldn't agree more. All we're seeing is artificial growth - most based on fantasy money. I really figured the Dow to level off at 11K - 12K then gradually climb as the economy truly strengthens as I see this as being the realistic comfortable level we should have returned to after the 2008 - 2009 fiasco. Lucky for us we kept buying during this time instead of selling off and things have worked out pretty well.

The big question is when the correction will occur. In my opinion it is not an if but most certainly a when. Since we're still shooting for an early retirement, timing on what to do with the bankroll is going to be key as I don't want to have to push things back another 5 years (that's what 2008-2009 did to us).

With the market artificially inflated, other issues that would have affected a more grounded market have very little bearing. But let the feds say they're just THINKING about pulling their money away (money which has not backing at all), and watch the markets tumble.

Everything is certainly not all sunshine and roses with this economy as some would want you to believe.

There does seem to be some correlation . . .


But at least the Chairman of the FED knows what he is doing.
"We've never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don't think it's gonna drive the economy too far from its full employment path, though." - Ben Bernanke - July 2005

When you have two competing theories that make exactly the same predictions, the simpler one is the better (Occam's Razor):

Corporate profits and corporate margins are at an all-time high.

..and good paying full time jobs have all but dried up but on the good news front, there has been a resurgence of part-time jobs(29hrs or less) available.

J

08 and 09 financial meltdown caused companies to layoff workers by the thousands and trim overhead. Most have not re-hired these workers. They continue to do more with less. Corporate profits have soared, that and cheap available money has driven this rally. When the fed eases
QE the market will probably retreat.
Cramer pointed out on last nights show "when S&P raises 20 percent the 10 month period it has every time continued higher for the remainder of the year". This guarantees nothing but typically the market works on trends.
I have some really nice profits in FB and AMZN and I am strongly considering selling off a portion of these holdings.

DonDiego doesn't understand.

What is it that forkushV is predicting?
And what is simpler than what?

The simplest and most obvious predictor of equity values is the profitability of corporations.