Sea Change?
Who needs bonds when there's stocks?
In fact, who needs anything when there's stocks?
Humorous questions, both. But they're being taken all too seriously these days, as tales of Robinhood riches (never mind who's seeing your order flow) make the national news and US indices seemingly hit new record highs with each passing session.
It doesn't help that cash yields are zero. Of course, that's nothing new. But it gets old. Cash was among the best performing assets in 2018, but that wasn't saying
If the stock market corrects by going flat for awhile, that would be a satisfactory result, aka sell in may and go away. Seriously that would take the froth out without serious damage. P/E compression is an event that seems likely to happen
Wouldn’t that be nice but it does not seem todo that. It creeps continuously up until and event occurs then it drops like a rock undoing the past months gains in a few minutes.
I’d like to back Ria here, but then my mind harkens back to the protracted period following the 2001-2 tech melt down. Earnings at solid tech firms kept rising but their share prices flat-lined as prices adjusted to lower P/E levels.
Will we enjoy that again? Dunno.
The difference, imho, is that the 10yr treasury was yielding about 6.7% on Jan 1,2000 and was lowered to 5.0% by January 1, 2002 — therefore, there was a “decent” alternative to putting more money in the stock market. Now, not many good, low-risk alternatives- assuming you want to make a return.
275 is impressive
well, i didn’t say how many reps. 🙂