Your thoughts on the 2022 market so far?

[crimsonghost747]

(01-13-2022, 11:42 AM)fenders53 Wrote: Just making conversation but how is everyone doing trying to predict the markets?  Wow this seems absolutely random with sector shifts every day or two, if not mid day.  I really think it's Algo based.  It has no real effect on my true long-term investments but everybody likes to add on a dip and this seems way beyond random.  The short or even mid-term economy projections don't seem to matter, nor interest rate or inflation rises.  Pandemic news is good for maybe an hour or two.  At the end of the day there is just nowhere else to invest until bond yields are way higher, and there is no guarantee that actually happens.   

Like I said, just making conversation. I won't let any of this rattle me, but out smarting the market in the short term seems even more futile than usual.  Whether buying or selling, limit orders seem prudent.  Don't force anything at a price you don't like because it might be better tomorrow.

Bond yields are definitely climbing up, in fact they have climbed up ridiculous amounts already. The 1 year US treasury yield is 87% higher than it was at the start of the year. No, that is not a typo. Even the 10 year yield is up almost 10%. Obviously the overall yields are still low and they will have to climb up more before bonds can really compete with stocks for a place in an income producing portfolio. But at this rate, we could be there sooner rather than later. 

The FED has their hands tied. They have played the "ahh it's fine let's just print more money" game for over a decade now, the results finally hit them in the face. I agree that the FED likes to see the markets green, but with these inflation numbers they simply are out of options. They have to fight inflation, and that means rates going up at least a little, and maybe even more importantly they will bring QE to an end and start unloading assets within the next couple of months. I do not predict massive moves on either front, the FED certainly won't crash the market, but they have to show that they are serious about fighting inflation. And then when they survive until the end of summer, they can claim victory since the inflation numbers will appear small in comparison to what we had in 2021.

Overall thoughts: stonks only go up in the long-term. A little correction here is healthy, and the FED moves mentioned above will be very healthy for the economy.