Interested to hear your opinions on whether or not you believe we are in a bubble? If you do believe we are in a bubble how are you allocating your funds?
Will allocate to my chosen ETFs every month regardless of any bubble or crash, I’m in it for 20+ years so any crash only resembles discounted pricing for me
I think there’s a bubble in certain tech stocks, people seem to think it’s impossible that they could go down, and FOMO seems to be driving the price. Although I don’t really think the broader market is a bubble.
My strategy isn’t changed by this. I’m not trying to chase the big hyped up story stocks. I’m well diversified. I think long term I’ll be alright even if we have a major correction or crash. I’ve also knocked a huge amount off my mortgage by over paying it last year. I may do more of that if I think the market is looking like it’s going to top
As long as interest rates stay low and QE continues, I don’t think the bubble is about to burst. In fact I think we could be entering a stimulus fuelled decade of growth in stock markets.
There will be corrections and some industries will do very badly though.
I’m allocating my funds to sectors I think will do well in this environment.
This doesn’t seem as unworkable as it did pre covid.
Universal basic income ( UBI ) is a government program in which every adult citizen receives a set amount of money on a regular basis. The goals of a basic income system are to alleviate poverty and replace other need-based social programs that potentially require greater bureaucratic involvement.
Really good book on that called Utopia for Realists. It certainly looks like a good idea
I agree with @hookedinvesting, liquidity is king and there’s nothing you can do about it. I think we will get an inflationary surprise at some point though - not anything high obviously, but enough to cause a taper tantrum. I’m decidedly bearish on the US cap-weighted market though, especially since the election results and thats what Grantham seems to be getting at. I don’t think even the most ardent bull can point at the NASDAQ right now and categorically promise you 10%+ by 22. I can see something interesting happening when we’ve arrived at the vaccine-fuelled utopia of summer…
But how does the ‘system’ exit the stimulus period? That’s the burning question. The failure to raise interest rates is a disaster waiting to happen
Cash out some of your current gains, hold, and reinvest on a dip if you’re that worried. Otherwise ride the wave and hold.
people/media/journalist are talking about a bubble since 2016…
I think we’re moving towards Modern Monetary Theory (MMT), so governments will keep it going as long as they can.
But I agree, I’m not convinced on MMT and can see it going very wrong.
this guy is one to follow his film is okay to
ignore the link only found him last week the guys abit of a loon
There s no bubble.
We have lots of money from central banks, plus rate interest veeery low, so there are few alternatives to equity.
Enjoy this period… go big or go home!
The market is not in a bubble but:
Tesla is most definitely a bubble but if it bursts now how much will it actually go down? 50-75% dip in Tesla would still leave many investors up.
Bitcoin is a bubble but it might not be even close to popping
There’s an interesting quote about Tesla in the link above
As a Model 3 owner, my personal favorite Tesla tidbit is that its market cap, now over $600 billion, amounts to over $1.25 million per car sold each year versus $9,000 per car for GM.
MMT is a description of the monetary system and not so much a school of thought, with this year being a good example despite what Andrew Bailey says.
The questions that are more interesting are: where is the money going, how long can interest rates feasibly stay at the lower bound, what is government policy and how does this affect a country’s balance of payments? The US can sustain government and current account deficits because of global reserve status but what about if in 2040 most of the high tech/value goods in the world are exported from China, and the authorities dont mind slipping the renminbi to less than 6 to the dollar?
Ultimately the only reason QE works is that we all believe is has to work, that debts are actually worth something and that we will have a pension to retire on. All maintained by a government yes, but still simply a construct.
i dont know something just dosnt seem right or is it just me?
little theory of mine (pensions appear to be a problem and the lack of efforts in fight on covid in the west seem to indicate this)
Cannot put a reply better than this one, even if there are soo many theories to say about the USA valuations in tech.
Speaking of pensions, I read this yesterday
Pension funds need a radical rethink - Subscribe to read | Financial Times