What is up with the stock market?

This is not always the case. Witness the near simultaneous 2008 collapse of Stock Prices and the Oil Market. In some ways they fed one another. The run up in oil prices was mostly based on speculation. High oil prices was one of the final nails in our 2008 economic coffin. As multiple crisis converged, stock prices collapsed. Many of the same speculators that were buying oil futures were still long in the stock market. They needed to start selling their oil positions to cover their margin calls on their stock market losses. This caused an oil selloff at the same time as declining real demand. Both markets declined by 60%.

The Great Depression is another example of a stock market bubble collapse followed by severe deflation in commodity prices because of slack demand.

In 2008 I was wishing I had iced some of mine down in a safe fund. Now wondering the same thing. Probably should park some.

I'm riding DIS into early retirement.

As long as the Federal Reserve continues to buy up excess debt to keep interest rates low, the stock market will go up.

Also since Europe continues to have so many problems, chinese growth may not be what it seems, Russia having currency issues due to the worldwide natural gas surplus and the crazy Middle East, the US stocks and bonds can be considered in the "sucks less" category.

However once the easing programs stop, interest rates will rise and stocks will drop.

In the meantime enjoy the ride but pay attention!

The major investors understand the reasons for rises in stock prices are not well supported by fundamentals. Hoops described the reasons quite well. That's why we occasionally see big drops. The big investors have their fingers on the sell button. That's why we could see major drops in a short time period. When the bottom falls out it could be dramatic.

They not only have 'their fingers on the sell button', they have automated high frequency trading programs that move millions of shares in seconds. In fact the average amount of time a stock is now held has gone from a period of years to a period of seconds. In many ways, stocks are no longer an investment tool but a traded commodity where price and not fundamentals matter. AlanLeroy has done well by only investing in Quality Companies with good dividend yields. These investments have become very hard to find.

Currently there's no better place to put your money currently. I don't beleive a cd at the bank outpaces inflation, so you may actually be losing money there, may as well keep it under ypur mattress. When you say getting a secure 4% I'm curious to lnow what secure vehicle there is today to get that. I only mention because may want to check, if it's a bond fund that's exposed to foreign governmental bonds it may not be as secyre as you may think, I certainly hope not, but might want to check my friend.

I'm in the camp that as soon as the Guv shuts down the printing presses and interest rates start to rise there's goinna be a stampede for the door, that will be the catalyst for some bleak times. The 64K question is how bad and how long? A year?, then everyone goes "meh" and return to normal. Or six months of not much more than a whimper, or the beginning of mad max kinda times where the lord Humongus rules the wasteland? I don't know, but I do watch current events daily along with cnbc and read current financial sites. My finger will never be very far from the sell button when/if it comes to dump some stuff, I have already pulled back on a few things with some tidy profits. If it's one thing I've learned over the years is a tidy profit is much nicer than a quick swift kick in the nads all the while laying on the ground in a fetal pos. muttering "why didn't I sell..why didn't I sell..."

J

The 4% is a retirement account my former employer, Hillsborough County, contracted with the The Hartford. It is renegotiated annually. If and when it changes I will be shopping around for something else. They currently offer some good bond funds.

When I first started investing in The Hartford fund Jimmy Carter was president and my home loan was 14.75% (not a misprint)
The Hartford fund was paying a fixed 12.5%.

Sometime before 2:00PM EDT today a rumor circulated on Wall Street today that the investment firm Seabreeze Partners was about to release a report suggesting that the Federal Reserve is going to begin to "taper off" buying US debt soon.

The markets noticed:


9 May 2013

There is a prediction that 30year fixed rates will go back up to the low 4's by year end, due to the government pulling back on buying debt. That is still a great rate, but I caught it at the very bottom and got 3.25% with 0 points.