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"but withdrawing from stocks and investing in bonds strikes me as having been a panic move - not wise at all." Stocks now are totally over priced, and investin
by forgottenpaswrd 13y ago
"but withdrawing from stocks and investing in bonds strikes me as having been a panic move - not wise at all."
Stocks now are totally over priced, and investing in bonds is not wise when the central Banks are printing money.
So the best thing you can do is use your money on yourself in a productive way.
- buyx 13y agoAt the time, I doubt that overvaluation was a problem. More likely it was classic "buy high and sell low" panic writ large.
- enoch_r 13y agoBeing able to consistently beat the market--for example, to be able to easily and confidently identify times when "stocks now are totally over priced"--is an enormously valuable skill. I mean, plenty of people say that stocks are over- or under-priced. But study after study shows that their predictions, on average, fail to beat the market. Study after study shows that someone whose predictions or buys were better than average one year fail to beat the market the next year. Study after study shows that market timing does not work. I'm not trying to be a jerk, but it always baffles me when highly intelligent, scientifically-minded people completely ignore the vast stores of evidence we've gathered about their likelihood of beating the market.
- gohrt 13y ago> So the best thing you can do is use your money on yourself in a productive way And this is of course how macroeconomics is designed to work: Inflation makes "green paper" unappealing, which stimulates investment in productive activity, which generates products and services, which compete for the greep paper, which curtails inflation.