Thoughts on the stock market at present?... In recovery?

StevieJ

Reaper wrote: »

One thing that strikes me odd is the way people say the yields are high - but they are using the dividends based on the last 12 months.

I'm sure banks aren't going to be paying those levels of dividends again for a long time, if ever. Likewise all the high street blue chip stocks will be reducing their dividends once the reality of the depression starts to bite.

So in my opinion many of those articles going on about cheap stocks are not very realistic unless you are buying for the long term.

Shell, BP two of the biggest of blue chips have just increased dividends well above inflation. In fact as far as I am aware Shell have never reduced their dividend.
A savvy investor could have picked up Shell within the past couple of weeks in the
12.30s and paying a divi of around 8% tax free to a basic rate investor.

Bollingbrook

It depends how important that £10K is to you. If you may need it or you'll lose sleep at night if it turns into £5K, then don't do it... unless you are quite prepared to wait a few years for the upturn. The gains will surely come, but no-one can say when. That's the point.

1echidna

I wish I knew where the stock market was headed. Are we being fed flannel that the banks are on the road to self sufficient operation? Just how much damage is the credit crunch doing to the wider economy? Is the burden of debt (private and public) sustainable? Just what are the long term prospects for the UK economy? If we get grim news about these matters I certainly agree with those that say we are still in a bear market. We are also dependent on what happens overseas, particularly in the US. Signs that the US economy is slowing markedly (for example heavy falls in vehicle sales) do not bode well.

StevieJ

1echidna wrote: »

I wish I knew where the stock market was headed. Are we being fed flannel that the banks are on the road to self sufficient operation? Just how much damage is the credit crunch doing to the wider economy? Is the burden of debt (private and public) sustainable? Just what are the long term prospects for the UK economy? If we get grim news about these matters I certainly agree with those that say we are still in a bear market. We are also dependent on what happens overseas, particularly in the US. Signs that the US economy is slowing markedly (for example heavy falls in vehicle sales) do not bode well.

Imagination is invariably more powerful and negative than the reality.

[Deleted User]

yes in answer to the OP but be selective

copied

"ING reviewed the UK banking sector today, starting Barclays with a sell rating and 150p price target and Royal Bank of Scotland with a sell rating and 50p price target, while giving HBOS, Lloyds TSB and HSBC hold ratings.

itsmickdundee

The problem is that even the experts wouldn't know when we have reached the bottom.

The other is this: in all previous (post war) recessions, they didn't proceed the world-wide collapse of almost every retail and investment bank in the world. So this time around, it's almost a "double" recession.

And that people. is why many investors are still being very cautious. Those who are all piling into the market are causing the inevitable spike. But gut feeling is telling me that it will fall further still - and this same gut feeling saved me from the Rock and from RIO's quite spectacular crash! Granted it's not saved me from other potential losses, but there is just something a little clandestine about the markets right now.

And yes Phil, hindsight is all well and good, but that's another thing about investing - you'll never buy at the cheapest or sell at the highest. It's just the way it goes.

Good choices with your stocks, but then you probably could have chosen any number of different stocks and seen a profit... But I still don't think this current spike will last much longer and it's still risky business investing in companies who have not been technically analysed - unless you do what someone else has already mentioned - buy quality (top 20 in FTSE 100) - and you can't really go wrong.

It's just you'll most likely get superior returns in higher risk, yet still "strong" (eg midcap) companies - such as YGE for example!

For long term trading, I wouldn't say right now would be a bad time to invest, but be prepared for an initial large drop or two in the short/medium term. But if you want to get out as quickly as you went in to skim off a nice profit, I would recommend caution. It's just historically not a particularly successful investment strategy..

phil_b_2

this upward movement can't keep going forever, and the risk of the next big slump is keeping me out but it's a bit agonizing watching my would-be stocks soaring (though hoc has finished in the red surprisingly).

What is driving todays strong rally??? I can only assume its to do with election day. One wonders what the heck will happen tomorrow...

1echidna

StevieJ wrote: »

Imagination is invariably more powerful and negative than the reality.

Actually people never imagined what has happened so far in this economic crisis and if they had, the reaction of the markets would indicate that reality was more powerful and negative than they had invisaged.

StevieJ

1echidna wrote: »

Actually people never imagined what has happened so far in this economic crisis and if they had, the reaction of the markets would indicate that reality was more powerful and negative than they had invisaged.

If you listen to some bods you would think it is the end of the world. No it isn't it is another banking crisis and recession, they happen every now and again.

peawack

Take no notice of p/e ratios anyway. The rules of investment have changed, and p/e ratios are based on future earnings : i.e. 2009. With a deep and prolonged recession (possibly a depression ) on our door-step, these ratios are nigh on irrelevant.