Just Put It In Stocks

Just Put It In Stocks

"Just put it in the stock market. You'll always make something." I heard that from someone over the weekend. Scout's honor. And it's true, depending on your definition of "make." If you're sitting on a spare, say, $100,000 that's currently dying of boredom in a money market fund, you can move it into a handful of blue chips and generate a little bit of income. The figure (below) just shows there's still some $4.3 trillion idling on the proverbial "sidelines" -- the ubiquitous "dry powder."
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20 thoughts on “Just Put It In Stocks

  1. A thought: What if the Fed is intentionally engineering one of the great asset bubbles of all time so as to fatten the 401ks of boomers and help assure them they can afford to ditch the rat race and head south to The Villages, or wherever, clearing the employment decks for the huge and increasingly restless millennial and Gen Z cohorts? It might just be me, but I am noticing a definite uptick in retirement announcements from folks who have been at it 30 or more years.

    1. The Baby Boomers got lucky again. The Fed-engineered recovery in equities would have been successful had the Fed only stopped a 1929-event from occurring. An $SPX recovered to 3100 to 3200 for year end 2020 would have been a miracle enough. We instead got an overshoot, some might say.

      But, hey, too late now and I guess we’re all the better for it, unless you are the opiate-addicted, homeless bum with a bad back, who lost his job and family years ago, and lives on $700 a month in SSI disability.

    2. The ‘market’ is now the proxy for the economy. Financial action makes the front page every day, not economic news. Whatever moves Powell and Yellen make will be judged by what happens to the financial markets. Why? because the market is where most of the unequal distribution of wealth is held and the wealthy are driving the bus.

      1. Funny you mention the watch. I thought about that.

        I would find the The Grandmaster Chime too Brahmin establishment for someone who ultimately in life found comfort writing for friends…and also for strangers, strangers who hang in the peanut gallery and drink warm PBRs while reading the entertainment.

        For this reason, I was thinking of the modest offering that is the Patek Calatrava Reference in Pink Gold.

    1. Beginning to end, the tone of this piece reminded me of Joe Kennedy’s famous explanation of why he went to cash before the 1929 crash:

      “Taxi drivers told you what to buy. The shoeshine boy could give you a summary of the day’s financial news as he worked with rag and polish. An old beggar who regularly patrolled the street in front of my office now gave me tips and, I suppose, spent the money I and others gave him in the market. My cook had a brokerage account and followed the ticker closely.”

      After years of reading H I’m aware that history doesn’t repeat itself (but it rhymes); that you can’t fight the Fed; that every cycle is different and that modern financial engineering has changed the face of capital .. so I don’t mean to imply that we’re headed for another 1929-style crash.

      However: the sentiment from the man on the street, lunatic or not, does seem to rhyme pretty well with peak-of-the-bubble sentiments from a century ago.

  2. I get what she is saying,
    I have zero allocation to bonds. Instead, my goal is this-
    in a worst case scenario, I can cut living expenses here and there and live off 80% of the dividends (in case dividends are also cut). I have cut my fixed living expenses a lot over the past few years.
    My “blue chip” dividend stocks have gone up some, but not much, since I redid my portfolio (later part of 2020)- but that is ok.
    Maybe my portfolio won’t go up every single year, but I will be able to hold until it does.

    1. I sold out of all my bonds as well. Selling out of bonds in 2020 was one opportunity, a rare one at that, for retail to front run institutions…and dare I say even front-run the “forever-rapacious for fools’ money” hedge funds.

      There’s nothing wrong with a Blue Chip dividend strategy. I should be so lucky some day to live comfortably off 80% of the dividends paid by such firms.

      This all said, 2021 might be a year for the record books for buybacks and dividend hikes. We’ll see.

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