4 ms·
Sinking more money in the stock market is the same as getting a worse deal or concession in any fund. Stocks are already bought up to levels that don't make a
by gammateam 8y ago
Sinking more money in the stock market is the same as getting a worse deal or concession in any fund.
Stocks are already bought up to levels that don't make a meaningful theoretical return if the individual companies started returning capital via dividends.
Bonds are in the same situation, they have been bought up beyond sane levels (theoretical return based on coupon and yield curve) pushing their yield to lower rates than risk and inflation would warrant. Basically, with bonds you have to accept that some issuers will go bankrupt and you get a 100% loss on that portion of the portfolio, therefore the whole portfolio of bonds has to account for that risk and it can't right now, if you keep buying more of them at higher prices
Getting out of the public markets you go into the private equity markets. There are plenty of investments to fund which nobody else is funding due to the way the deal looks or the way the team looks. You go further out on the risk curve, and also accomplish the goal of keeping money flowing in the economy.
This is what the central banks wanted to happen: assets prices and yields of everything passive is so unattractive that people are forced to make their capital more productive in the economy. Sure they didn't expect people to plow into crypto, but risk is risk and yield is yield.
It is more likely that Softbank functions as an economic stimulus backed by the Bank of Japan's economic policy decisions.