Will the DOW continue downward?
 

Friday was a mess. Will the DOW start to crash? The market does not like uncertainty. What do you think?

There is always uncertainty. Always. So many variables it’s hard to know, or even speculate. I feel like the market overall is inflated and due for correction. As such have moved to less volatile positions.

I thought with our new administration in place, peace, and unity were prevailing ?

Take it to PARF...

Equities have been the only game in town, and juiced by the FrED for years.... on a 11 year bull run. Overvalued might be an understatement...

Yep, in mid December. I figure that missing some gains short term beats the snot out of taking a hit like 2008.

I will revaluate periodically and move back into the market when the time is right.

Let me know when that is!

I’ve retained about 40% in equities...willing to ride the rollercoaster a bit as retirement is still a few years off.

We are retired so must be careful! In 2008 friends lost thousands in their 401k. Can’t do that in retirement.

Precisely why I am on the sidelines, watching and watching. I lost about half of my 401k before I could get the remains into a cash position paying 3%. Cannot risk that in retirement.
Greed is not one of my character faults. No room for it as it would have to displace one of the others😬

In the big picture, you will make far more money in equities than you stand to looose, and far more than you would make in less risky investments.
BUT if you are retired, it's a good idea to be a little more conservative.

I look at it this way:
If you need to live off that money for the next five years, you can't afford a big drop and should be investing in a guaranteed annuity or something even though in the long run, that's a poor investment.

Personally, I only had about 25% in equities (until last week) even though that was way too conservative for my situation.
I had enough in cash to sustain short-term, and could looose about half and still survive long-term. But I really hate loosing money.
I'm more willing to pass up any gains just so I don't hafta watch the balance go down. At all. Hate that.

Assuming you don't need the money to live on for the next several years, the ex-perts say the smart move would be to pick good solid long term equity investments. Say 40 or 50% in stocks both domestic and intl, and the rest in bond indexes (foreign and domestic) and a little in cash.

Now having said that, I'm on the sidelines watching to see if the bubble pops.
Even though they say that trying to time the market is a fool's errand.

Plus I'm worried about being so heavily into bonds when inflation eventually kicks in.

The market doesn't like uncertainty and they don't have confidence in the current climate that they won't be stabbed in the back by opportunist politicians. Going down.

The better question - why would it go up? Or another question - what justifies the recent record highs? Much of the country is still at least partially shut down, even businesses that are open are largely hobbled due to CV restrictions, and there’s already serious noise about tax increases and policy changes that will lead to job losses. So why would it go up or stay up?

Where else is there to invest? There is a steady flow of 401K money being dumped into the market so it needs to go somewhere. You could put your money into real estate but the average aloe does not have that option. Savings accounts provide negligible returns.

Try Googling..."The Stock Market Climbs a Wall of Worry"

LOL!
I'll have to remember that one.

If it holds, the Dow is up almost 800 in the last two days.
I'd say that is an upward trend.

Count On America For Chaos

The complexity of the USD monetary system on the global monetary system and economy has so many variables constantly interacting with each other that it is truly unfathomable. It has to be done on a practically daily case by case basis. The Global economy is a continuing process or mechanism with multiple functions that are constantly in motion. Statistical systems as a barometer are only a snapshot in time. Charting past performance only gives you an idea of trajectory. You can think of the Global economy as a living and breathing entity which does have a collective sentiment. The trick is to have clarity about what the pulse of that sentiment is and means at any given time.


From March 2009 until September 2012 Equities could be considered to be in a "snap back mode" from the abyss that was the 2008 crash. The economic SYSTEM had been stabilized through stimulus and FED accommodation and was remaining in flux through the EU Debt crisis (Greece, Italy, Spain etall) in 2010 and the US Tea Party's attempt at fiscal sanity which ended abruptly when Standard & Poors DOWNGRADED the US BOND rating. Since then there has not been a squeak from Congress about fiscal sanity. In 2012 with the RE market CRUMBLING along with the Economy showing signs of morbidity the FED launched QE3 as a LIFE SUPPORT measure. Of course the thinking was that the economy would grow strong enough to stand on it's own two legs again without FED accommodation. From that point in September 2012 on wards Equities have done virtually nothing but rise and will continue for as long as the FED or US Treasury can maintain credibility and or has the ability to provide the liquidity from a policy of Accommodation. In other words the FED stops Accommodating and the economy and Equities DIE.

This was very clear to me the moment that GW Bush came on the TV in October of 2008 proclaiming a "MELT DOWN CRISIS." That this crisis was a GAME CHANGER, a SEA CHANGE end of an era of unprecedented American prosperity. That awareness and the SUBSEQUENT myopic stupidity of epic proportions has done nothing but squander any remaining chance at salvaging the situation. Since March of 2020 and the catalyst of CV which exacerbated an already terminal situation it DOES NOT MATTER ANYMORE. The economy is comatose having barely a pulse left which is completely supported FED provisions of liquidity of 120B a month and US Treasury stimulus of now sending checks directly to Americans as a stop gap measure. There is essentially a QUASI NATIONALIZED ZOMBIE SUBSISTENCE ECONOMY. Yet the thinking remains delusional and the behavior has become psychotic.

PEs are high right now, but bond yields suck. Maybe it will go down or sideways until summer.

Later on, it will go up as the economy strengthens and pent-up demand gets things going.

Trying not to PARF this...
The Biden admin policy's are job killers, the market always looks to the future, so why is it going up? Yes the economy has been juiced like never before with the stimulus plans, but this will run out fast...
My simple theory, the markets are ran by the big boys, the big boys live and work in NY. What party controls NY? They cant let Biden look bad...not for awhile anyway.

You forgot San Francisco, and parts of Florida.

Rather than parf it up with a non-specific claim and a name, why not just list the policies that you think are killing jobs.

You don't get it...