Is the Stockmarket in a bubble?

DiggerUK

There isn't enough easy credit about for this to be a bubble, but QE has certainly been the steroid of choice for some.

All I seem to see on this thread, are a lot of people who are relieved to be along for the ride, can see it is going to end one day, and are trying to decide when is the day to cash in their chips.

And then....
..._

gadgetmind

And then we'll see share prices drop for a while, just as they always do from time to time.

However, the really hot money is still on the sidelines, and I suspect it will be for quite some time to come.

grey_gym_sock

does that mean the sidelines will melt, and have to be repainted?

DiggerUK

gadgetmind wrote: »

......the really hot money is still on the sidelines, and I suspect it will be for quite some time to come.

What gobbledygook is this?
People are desperate for a decent return on their loot, and will take ever more risk to try and achieve that aim.

Having money doing nothing is not the game to play for ever and a day, especially at current interest rates.
..._

gadgetmind

DiggerUK wrote: »

People are desperate for a decent return on their loot, and will take ever more risk to try and achieve that aim.

Yes, but that's mostly flowing into bonds, particularly high yield.

Having money doing nothing is not the game to play for ever and a day, especially at current interest rates.

Agreed, and I've been at sub 10% cash (with a good half of this being index linked) for several years. Come April/May, it will be time for me to rebalance, and some equities will get trimmed as a natural consequence.

I even did some selling today but that was to use the last few £k of this year's capital gains allowance for a family member.

cepheus

doughnutmachine wrote: »

i have a US 20$ coin from 1910, it contains an ounce of gold, so it has a gold value of $1600. money printing has always happened...

$20 then is worth $514.34 dollars today so it has held up well, about a 3% return plus inflation, but the price of gold is volatile.

Shaolin_Monkey

cepheus wrote: »

Yet the FTSE 250 is still up. Once again, it's like having two separate economies,one real for workers, the other a respectable casino for [STRIKE]gamblers[/STRIKE] investors. Perhaps the strength of Sterling reflects the national economy better than indigenous stocks?

Perhaps the two are linked? There was for a time a negative correlation between dollar strength and the US stock market. In other words when the dollar weakened, the US stock market went up. On days when the dollar weakened a lot, the market rallied strongly. A weakened currency helps any UK firm wanting to export as well.

NPowerUser

Isn't oil priced in $$$

A falling £££ = higher petrol + diesel = price goods go up, inflation starts to increase.

I appreciate a falling £££ is good for exports but how does that help joe public when it comes to buying shopping or driving a car or paying my gas bill?

They are talking about the £ falling 20% against the $ this year, is this good for us and should we be celebrating?

Macca37

I think later this year the UK economy will finally start to grow again even though so far it has had a few false starts. With growth the prospects for the wider UK stock market should improve.

I would therefore hope that we will see shares continue to rise and be at a higher level at the end of the year than they are currently at just now.

This doesn't mean that there won't be fun and games along the way however!

gadgetmind

NPowerUser wrote: »

They are talking about the £ falling 20% against the $ this year, is this good for us and should we be celebrating?

As most of my investments are in real things (or index linked) then it doesn't impact me too much. In fact, I note that £350 of the dividend income my wife will receive in March comes from companies that pay out a set amount in USD and then convert to local currencies just before paying.

Most of my employer's earnings are also in USD and we have never hedged to any great extent.

Unless you're sat with too large a cash allocation, these currency moves are mostly just noise.