03-04-2020, 05:49 AM
I am surprised to learn this past week that most of this forum has a significant cash position, except for some on the youngin's. I hope we don't discourage any of them with my our chatter. This is a DGI forum, and the correct answer for somebody young with a $10K port is full steam ahead. Just buy quality all your way through this. Try to time the bottom for 40 years, and you'll miss the bus, and probably submit to the FOMO and buy high at some point.
That said, some cash seems prudent. This seems to be a market looking for a reason to be volatile. The virus could very well be legit. The political excuses I hear from the talking heads are laughable. The market is scared because Bernie had momentum, the market is happy because he won't be Trump. Today it may run because Biden has momentum. If he gets too much momentum they'll get scared Trump won't beat him. The political winds aren't investable, and maybe not even tradeable other than providing an excuse for volatility. It's just a casino right now.
I'm not saying growth stocks won't remain popular, but the market will get back around to higher dividend stocks IMO. Maybe not so much oil, tobacco and other high headwinds stocks like some of the REITs. There are now lots of quality boring stocks paying 3-4% after the 20% pullback many of them have seen, and quite a few of them are aristocrats. We should be able to come out of the back end with higher yielding ports. I don't think we will see 15 PEs for most of them though. That would require a 50% correction in SP if their earnings pullback. In effect, you are predicting a harsher than average recession. Of course it could happen, but it's not my prediction with all this liquidity, and a President who will no doubt cut taxes if he gets concerned at all about the polls. I think a correction like that is off in the future, but that's what makes a market. 2020 is going to be a ride. That seems like the easiest prediction ever.
Now I need to hear some more sky is falling price targets from Divemenow the stock Swami.
That said, some cash seems prudent. This seems to be a market looking for a reason to be volatile. The virus could very well be legit. The political excuses I hear from the talking heads are laughable. The market is scared because Bernie had momentum, the market is happy because he won't be Trump. Today it may run because Biden has momentum. If he gets too much momentum they'll get scared Trump won't beat him. The political winds aren't investable, and maybe not even tradeable other than providing an excuse for volatility. It's just a casino right now.
I'm not saying growth stocks won't remain popular, but the market will get back around to higher dividend stocks IMO. Maybe not so much oil, tobacco and other high headwinds stocks like some of the REITs. There are now lots of quality boring stocks paying 3-4% after the 20% pullback many of them have seen, and quite a few of them are aristocrats. We should be able to come out of the back end with higher yielding ports. I don't think we will see 15 PEs for most of them though. That would require a 50% correction in SP if their earnings pullback. In effect, you are predicting a harsher than average recession. Of course it could happen, but it's not my prediction with all this liquidity, and a President who will no doubt cut taxes if he gets concerned at all about the polls. I think a correction like that is off in the future, but that's what makes a market. 2020 is going to be a ride. That seems like the easiest prediction ever.
Now I need to hear some more sky is falling price targets from Divemenow the stock Swami.