So where is the stock market going?

[dennis thompson]

Usually I'll watch CNBC while having my lunch. Today,as they do many days, they were discussing where the " Market" was going. As usual one highly qualified person made a very good case that the market was going down while another equally qualified person made an equally good case for why the market was going up!
This reminded me of a statement by Michael Price, an investment billionaire, who, when asked what he thought the " Market" was going to do, said: I have no idea, all I try to do is pick out good stocks. Amen to that.

[Bruce King]

Usually there would have been a huge correction around 2018 but it’s just different now with all the money the fed pumps into the system. Also low interest rates causes even the rookies to put money into stocks. It’s over priced no doubt but will probably keep going up until something bigger than covid happens then it’s going to be a huge drop. I figured my retirement on small investment returns so I got out awhile ago except a quick 30 day or so buy and sell for profit deal. Waiting on the huge drop to buy much.

[Doug Dawson]

Usually I'll watch CNBC while having my lunch. Today,as they do many days, they were discussing where the " Market" was going. As usual one highly qualified person made a very good case that the market was going down while another equally qualified person made an equally good case for why the market was going up!
This reminded me of a statement by Michael Price, an investment billionaire, who, when asked what he thought the " Market" was going to do, said: I have no idea, all I try to do is pick out good stocks. Amen to that.

In 2008/9, when the market tanked, I didn’t do anything. This past spring, when the market tanked, I didn’t do anything. Things are okay. In the long term, the market will do what it does, and with the modern miracle of index funds, you shouldn’t have to think about it to do okay. Tune out the “noise”. In the very long term (decades or even many decades) stuff tends to even out in your favor. There are many people out working in the fields of corporate governance whose fiduciary business it is to make capitalism work for the stockholder. I will leave the worrying to them.

[Jim Koepke]

The best prediction ever made concerning the direction of the stock market has been attributed to a few wise men of business including J.P. Morgan and John D. Rockefeller:

"It will fluctuate."

jtk

[Larry Frank]

The question really what is the new administration going to do and when.

I expect a pull back at some point of 10% or a bit more. What one does depends a lot on their age and financial situation. My wife and I have been discussing this with our advisor to get a plan we are comfortable with.

[Malcolm Schweizer]

I made a mint this year. Had I invested in Tesla like I wanted to, I would have made a whole lot more.

[Terry Wawro]

After roughly 35 years of investing, the one thing I know for sure, is that no one knows for sure. The "experts" are wrong so often. The 24 hour news channels have to have talking heads to fill up the air time. I just put my money in, ride the tides, and let it grow.

"Time is your friend; impulse is your enemy." ~ John C. Bogle

[Tom M King]

I knew when they passed laws allowing people to invest their money in it with tax advantages, that it would be a sure thing. That was a good while ago. There are large numbers of people who want to put money into it every week. For that reason alone, it will go up more weeks than it will go down. When something bad happens, like 9/11, it can go down severely, but after such a drop, it will fluctuate wildly, which makes it even easier to make a lot of money in a short time. It's way past the point of being much about the real value of companies.

I'm in, and out to make money. Not in to make an investment.

[John K Jordan]

I just checked my crystal ball - things will be fine until the middle of next year.

447320

I personally leave leave my bucketed investments alone and ignore the ups and downs. And pointedly don't look at the numbers except every six months or so.

[Stan Calow]

The stock market is not the economy. A good market doesn't mean anything but how willing people are to gamble. Like Tom said, buying existing stock doesnt add any capital into a company's assets or create new capacity, its just people trading paper back and forth like baseball cards. My retirement income is dependent on it, so I'm happy to see it grow, but I don't credit politicians sacrificing other important things just to make it grow faster.

[Ronald Blue]

I just checked my crystal ball - things will be fine until the middle of next year.

447320

I personally leave leave my bucketed investments alone and ignore the ups and downs. And pointedly don't look at the numbers except every six months or so.

That's the key John. Invest in solid stocks and leave it alone. It's better to be in several as well. The "don't put all of your eggs in one basket" philosophy.

[Bill Dufour]

I made a mint this year. Had I invested in Tesla like I wanted to, I would have made a whole lot more.


I managed to convince myself that Tesla was worth buying about six months ago. It is predicted to go up another 50% because it is being listed on the S&P 500. Being listed means all the ETF mutal funds HAVE to sell whatever it is replacing and buy Tesla regardless of price. Then after a few months the tesla will fall down as demand drops off.
I have a very small investment in Enphase which is doing well. They make the mini solar converters mounted on each panel at the factory.
Bill D.

[Thomas McCurnin]

Stock Markets hate turmoil and love stability and certainty. Now that the election is final, the stock market has gone up and will continue to do so. It will also recover after vaccines make it possible for workers to be employed in the industries that are presently shut down. The stock market will like the new round of stimulus checks as well.

The market is top heavy, e.g., it is valued too high for its actual value, but this is a function of necessity--there is no other place to place large amounts of capital.

Earnings, as opposed to equity, remains a concern, so unless earnings go up, there may be a correction this spring.

My stock has advised me to sell the gold (it made a bundle this year, due to turmoil) and put it in High Cap Blue Chip stocks with long histories of dividends and growth. Safe bet until spring.

[John K Jordan]

That's the key John. Invest in solid stocks and leave it alone. It's better to be in several as well. The "don't put all of your eggs in one basket" philosophy.

My advisor follows a "bucket" principle diversifying investments in various buckets of risk vs return. Maybe all financial advisors do this - I've never used anyone else. He analyzes things carefully but normally only suggests changes once a year or so and usually only very minor changes.

[Thomas McCurnin]

Yes, John, that is correct. We separate investments into a balanced portfolio of buckets, usually 3-6. When the present administration was elected, we switched a couple buckets to growth stocks. When covid hit, we switched the growth stock bucket to commodities. Today, I switched the commodity bucket back to growth. I always have stock market tracking bucket, which tracks the S&P, I always have a blue chip dividend stock bucket, and always have some bonds.

[John K Jordan]

Yes, John, that is correct. We separate investments into a balanced portfolio of buckets, usually 3-6. When the present administration was elected, we switched a couple buckets to growth stocks. When covid hit, we switched the growth stock bucket to commodities. Today, I switched the commodity bucket back to growth. I always have stock market tracking bucket, which tracks the S&P, I always have a blue chip dividend stock bucket, and always have some bonds.

Ha, it almost sounds like you and my guy have been talking!

[Aaron Rosenthal]

I'm an active investor.
One of the things I've learned that most full time professionals, with reasonably vast research departments, and a certain developed investment philosophy, are a blessed lot smarter than I am.
I watch some specialty TV programs, and listen carefully to their thoughts - NOT their picks.
Then I do my research, and if I like what I see, I'll buy with a definite target price to sell in mind. I also use stops.
I have a ways to go for my personal targets, but I don't need the money right now.

[Doug Dawson]

The stock market is not the economy. A good market doesn't mean anything but how willing people are to gamble. Like Tom said, buying existing stock doesnt add any capital into a company's assets or create new capacity, its just people trading paper back and forth like baseball cards. My retirement income is dependent on it, so I'm happy to see it grow, but I don't credit politicians sacrificing other important things just to make it grow faster.

At the most fundamental level, the value of a stock is about what you would consider that the associated company is going to do in the future. This is not gambling. If you want to gamble, go to Vegas. There is no conspiracy that I know of, where CEO’s of companies go to Vegas and bet on the craps tables to determine what their company is gonna do next. Heh.

[dennis thompson]

Yes, John, that is correct. We separate investments into a balanced portfolio of buckets, usually 3-6. When the present administration was elected, we switched a couple buckets to growth stocks. When covid hit, we switched the growth stock bucket to commodities. Today, I switched the commodity bucket back to growth. I always have stock market tracking bucket, which tracks the S&P, I always have a blue chip dividend stock bucket, and always have some bonds.

Doesn't this switching back and forth increase your tax liability? Unless , of course, your are invested in a tax deferred account ( IRA, 401K, etc)

[Brian Holcombe]

The stock market is not the economy. A good market doesn't mean anything but how willing people are to gamble. Like Tom said, buying existing stock doesnt add any capital into a company's assets or create new capacity, its just people trading paper back and forth like baseball cards. My retirement income is dependent on it, so I'm happy to see it grow, but I don't credit politicians sacrificing other important things just to make it grow faster.

One’s investing approach might be akin to gambling but the stock market itself is not. The function of the stock market is for companies to have easy and quick access to funding by raising capital with the sale of their stock. They sell equity, the public become owners with a stake in the company.

[dennis thompson]

Is investing in the stock market gambling? Certainly in the short run investing in the stock market is a gamble. But the difference between investing in the stock market and going to Vegas is that in the long run the odds are that your trip to Vegas will result in you losing money, while, in the long run, returns on the stock market have historically been positive.

[Doug Garson]

Me thinks for everyone who knows how to make money in the stock market by timing the market there are a few thousand who think they do. We invest long term in mutual funds thru a trusted advisor. Year to date this year we are up around 8%. I was thinking the market was heading down last March, our advisor disagreed, glad we took his advice.

[Doug Dawson]

Doesn't this switching back and forth increase your tax liability?

It certainly does, outside of the limitations of tax-advantaged accounts. There’s nothing wrong with paying taxes (that’s how a civilized society operates.) With investments that do really well, it’s part of the deal, that allows us to live in a country where that can happen. We also have good accountants...

[Bill Dufour]

My Schwab ETF fund charges about 0.02% a year in fees. No charge to buy or sell any stock. If you pay 1% more and get 1% more return then a non managed fund you have gained nothing except a higher tax bill.
Bill D

https://www.nerdwallet.com/blog/investing/millennial-retirement-fees-one-percent-half-million-savings-impact/

[Jim Matthews]

My Schwab ETF fund charges about 0.02% a year in fees. No charge to buy or sell any stock. If you pay 1% more and get 1% more return then a non managed fund you have gained nothing except a higher tax bill.
Bill D

https://www.nerdwallet.com/blog/investing/millennial-retirement-fees-one-percent-half-million-savings-impact/

Same approach with Vanguard for me.

The only stock purchase I made this past year was Plug Power. Everything else seems too much like gambling.

There's a lot of kited money sloshing around.

[Jim Becker]

I do the same with Fidelity...their funds. Zero cost. And let's just say that the market has been good to me to-date. I've only made minor adjustments since 2017 when I rolled my 401K and 403B into personal accounts there when I retired.

[Alex Zeller]

It seams to me that the market is high right now on hopes of another stimulus bill passing in Washington and the success of the vaccine. After that all bets are off. Another thing driving the market is the elections in Georgia. The odds are that at least one of the races will be won by a Republican. If the GOP keeps control of the Senate then Biden's tax plans are DOA. I actually did well last January. With Bernie Sanders looking like he could win the primary I moved a chunk of my investments to safe places. Pure luck as nobody expected the market to drop so fast thanks to the virus. At that point I moved the money back into a couple Vangard funds near the bottom. In the end what goes down always comes back up. It's the fools who could wait it out who jump ship who loose.

[Scott Kilroy]

My wife says the same thing and yes you could have made a lot more money but when you look at the company in depth somethings not right with Tesla. They have a lot of quality control problems. I know this from reading and also from firsthand of people who bought teslas and regret it. I really believe the fundamentals aren't right at Tesla and they're going to crash.

[Doug Dawson]

My wife says the same thing and yes you could have made a lot more money but when you look at the company in depth somethings not right with Tesla. They have a lot of quality control problems. I know this from reading and also from firsthand of people who bought teslas and regret it. I really believe the fundamentals aren't right at Tesla and they're going to crash.

I strongly suspect that this a personnel issue at the old NUMMI plant in Fremont. I’d be very interested to see how things change when the new Texas factory comes on line next year.

Here’s a start: https://www.nytimes.com/2018/11/30/business/tesla-factory-racism.html?searchResultPosition=1

BTW, the article is careful to avoid mentioning who is responsible, but you can get it from the comments.

[Jim Matthews]

Here’s a start: https://www.nytimes.com/2018/11/30/business/tesla-factory-racism.html?searchResultPosition=1

BTW, the article is careful to avoid mentioning who is responsible, but you can get it from the comments.

Perhaps you'll make your point, right out in the open?

Experts that actually get paid to build cars have stated theirs.

https://www.detroitnews.com/story/opinion/columnists/henry-payne/2020/05/12/experts-say-tesla-has-turned-corner-quality/3113880001/

[Stan Calow]

One’s investing approach might be akin to gambling but the stock market itself is not. The function of the stock market is for companies to have easy and quick access to funding by raising capital with the sale of their stock. They sell equity, the public become owners with a stake in the company.
Once the company has sold the initial offering, all the rest of the buying and selling is between people. The company doesnt get any more capital from those transactions. Its the daily back and forth trading that makes the price fluctuate. And most people participate in that process expecting to make money on transaction, not on long-term dividends.
I may have been flippant calling it gambling (I had just watched The Wolf of Wall Street again); speculating is more accurately the term. I don't know anyone anymore who buys or sells individual stocks based on the P/E ratio, but rather on guessing on whether the share price will go up or down.

[Brian Holcombe]

I’m aware of that, I was very specific in how I worded my post.

I agree that speculation is the word for it becuase even if you are buying on fundamentals, you’re still guessing the price will go up. They still move mainly based on fundamentals over the long haul, otherwise we would not care at all what their earnings look like. Things can get out of line with that fir short periods of time but reality strikes eventually.

The stock is priced at what the market determines after IPO and that trading after which has no effect on the money raised, but if a company needs to raise additional capital it can do by selling additional shares at market pricing. That is the reason why share price is important to any given company, it’s a way to raise capital as desired.

I invest for dividends for the same reason I would not give an interest free loan. Large cap Stock dividends are probably the last bastion of passive income that is actually turning a reasonable rate of return at a moderate risk. Bonds aren’t paying much at all until you get into higher risk traunches and owning real estate is too involved.

[John E. Hobart]

Dividends paid are one of the major factors in what I buy in the stock markets today, retirement does that to a person. That being said , the markets have been great for my portfolio this year, since Jan 2 my aggressive total portfolio is up right at 25% year to date.

[Tom M King]

Thanks Peloton, even though I like the NordicTrack bike better!

[Thomas L Carpenter]

I mentioned to my advisor that I don't mind paying taxes to support the way I live. She nearly had a heart attack.

It certainly does, outside of the limitations of tax-advantaged accounts. There’s nothing wrong with paying taxes (that’s how a civilized society operates.) With investments that do really well, it’s part of the deal, that allows us to live in a country where that can happen. We also have good accountants...

[Bill Dufour]

Well my tesla dropped 5% yesterday and is set to drop 4% more today.
Bil lD

[Bruce King]

The worst thing some do is to have their money invested in the same company they work for. I saw several do that when I worked at the airline and they lost a hundred thou or two. Some lost their jobs and their money.

[Malcolm McLeod]

The worst thing some do is to have their money invested in the same company they work for. I saw several do that when I worked at the airline and they lost a hundred thou or two. Some lost their jobs and their money.

Say it with me ..... E-N-R-O-N.

[Jim Becker]

The worst thing some do is to have their money invested in the same company they work for. I saw several do that when I worked at the airline and they lost a hundred thou or two. Some lost their jobs and their money.
The mistake folks make is to have "too much" invested in their own company. There's no harm in having some investment and when there's stock options as part of compensation as well as favorable employee stock purchase costs, and with careful management, one can often do well. The very expensive addition on our home was made possible by that. But as in anything, moderation and diversification is important to balance out risk. I do know many folks who put everything in their employer's stock blindly and did, in fact, lose most or all of it. I carefully managed things during the time my employer was publicly traded (went private a number of years prior to my retirement), including being careful about cost basis when selling to diversify. Between that careful management and fully embracing my 401K, I was able to retire early at age 60 and I'm living with net income similar to what i was earning while employed.

[John K Jordan]

...I was able to retire early at age 60...

Congrats! I fully support early retirement - I was quite fortunate to retire at 56 in '06 and am thankful for every day.

My heart aches for working people now losing their jobs, insurance, savings, housing and even hope due to complications surrounding the pandemic.

[Bill Dufour]

In vesting in one's company has a big drawback. My uncle worked for Lockheed and had a a stock plan. It worked great until it came time to retire. He had to retire early because the bushiness tanked at the end of the vietnam war. His retirement stock crashed and he was forced out. His stock did recover several years after he died so his widow was okay.
Similar happened to my wife's father at GE when they closed the US factories he had worked his entire life at. But her mother did not understand the market and sold all his stocks at the bottom when he was laid off and died soon after.
Bill D.

[Doug Dawson]

My heart aches for working people now losing their jobs, insurance, savings, housing and even hope due to complications surrounding the pandemic.

I’m totally with you there, it’s painful to think about. We’ve been donating money to the local food bank, and supporting other helpful causes.

[finlay gray]

Into a recession or where a Tesla car is headed.