Dow

chucknorris

Generali wrote: »

My point, obliquely made, is that a large part of the reason shares have been going up is because interest rates are too low to keep money on deposit.

This is exactly why I invested 20k in a FTSE tracker about a month ago and topped up with 5k last week, in addition to my stocks and shares ISA. I thought that it was worth taking a risk as savings rates are so low at the moment.

Plus the ratio of my cash held was too high to stocks anyway.

sabretoothtigger

My basic reasoning for holding shares, the supply and worth of company assets/shares is less then the share and supply of currency notes especially with international companies supplying growing countries.
Even if i buy at a bad price I figure eventually prices will have to rise ( in pounds). HSBC is on a high valuation but so long as they can continue to afford paying out that dividend its probably still worth holding.
We saw barclays fall today however as they are likely unable to pay much of a dividend from profits but they are actually still making profit in a recession

Surely you are comparing apples and oranges here?

In terms of risk I would equate holding a blue chip share to not that much different (long term) to holding cash right now. All the people asking why house prices are going up when surely their value must fall are imo going to realise holding large amounts of cash isnt safe.
This is a deliberate government policy

sabretoothtigger

This seems a reasonable gauge to market sentiment.
We've swung from one extreme to the other, if we were to keep that same pattern we'd fall worst in January onwards presumably

StevieJ

US and European markets having a solid start to the New Year :beer:

StevieJ

Ftse closes on a high above 5500 for the first time in a long while.

Mr.Brown_4

StevieJ wrote: »

Ftse closes on a high above 5500 for the first time in a long while.

Well done Stevie, keep it up.

Mr_Mumble

Here's a bizarre, and scary, query... is the stock market going up good for the average Briton anymore?

Government bonds generally move inversely to equities and it's arguable Britons will soon own more government debt than they do equity.

The government's 2009 Blue Book shows direct equity ownership by British citizens at only £400bn. Private pensions funds and life assurance policies are worth around £1.9tn with perhaps 40%-50% in equities. You're looking at a total private ownership of stocks at around £1.2-1.4tn. While this is far above the current £800bn net debt of the UK government the continued deficits have HM Treasury estimating net debt of £1.4tn by 2014!

A flat-lining of capital gain on stocks over the next five years (and reading John Authur's column in the Weekend FT this is a realistic scenario) could lead to the crazy situation that a future stock market rally is neutral or even negative for the British taxpayer, it will increase taxes (via the cost of borrowing) more than uplift in private pension funds and stock ownership.

StevieJ

Mr_Mumble wrote: »

A flat-lining of capital gain on stocks over the next five years (and reading John Authur's column in the Weekend FT this is a realistic scenario) could lead to the crazy situation that a future stock market rally is neutral or even negative for the British taxpayer, it will increase taxes (via the cost of borrowing) more than uplift in private pension funds and stock ownership.

You mean like he predicted the stock market bounce back in 2009 :rolleyes:

sabretoothtigger

the percent of bearish investors is unusually low. While that sounds positive, typically, this is a contrary indicator.

http://capitalogix.typepad.com/public/2010/01/capitalogix-commentary-010310.html

purch

the percent of bearish investors is unusually low

I was bearish once

Then I went outside, saw the sun was shining, and the birds singing and realised it was a miserable way to live your life.