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The price for equities is driven by supply and demand, like all other prices. Does COVID make you want to save more, or less? If it's more, given that bonds h
by QuesnayJr 6y ago
The price for equities is driven by supply and demand, like all other prices. Does COVID make you want to save more, or less? If it's more, given that bonds have extremely low returns, why not stocks? Especially if you think that there will be a sharp rebound next quarter.
I mean, I think the stock are overvalued, but it's not hard to see how we ended up here. I thought about rebalancing out of stocks to avoid a drop, but I'm stymied by the question: rebalance to what?
- xnx 6y agoRebalancing to cash would seem to make sense if you expected a crash. I gather that this doesn't happen because no one wants to pay a money manager to not invest their money.
- KozmoNau7 6y agoI foresee rebalancing to cash in October, see how the election turns out and shakes things up, then take a critical look at reinvesting in 2021.
- jiofih 6y agoAKA timing the market. Good luck.
- tanatocenose 6y agoDifficult but the way every great trader makes their fortune.
- christocracy 6y agoAnd if you miss the small handful of up days while dormant in cash, your portfolio lags.
- KozmoNau7 6y agoI don't care, as long as I end up with a profit on the bottom line. I'm not in competition with anyone, nor doing this as a career.
- ozi 6y agoOr just long VXX. Isn't increased volatility inevitable for virtually any outcome of the election, short of Trump just resigning?
- mcguire 6y agoBonds. Sure, a crappy bond now is crappy, but if everyone is right about QE to prop up the stock market, they'll be worth more compared to future crappier bonds.
- mxschumacher 6y agoIf inflation ticks up a little, they'll rapidly lose value. Bonds give you a contractual guarantee for zero upside. Those multi-decade sub 2% bond issuances are wild.