Is the stock market over heating?

gadgetmind

My wife holds shares in DLAR. :-)

jedsonack2

It has been bullish these days.. Buyers and sellers must consider to research about their stock to buy or sell.

cepheus

The world's stock markets have been closely tracking comments from the US for clues as to when the US central bank might start to rein in its bond buying programme.

The Fed is currently buying $85bn (£55bn) of bonds a month, and has said it will continue to do so until the US unemployment rate falls back.

The programme, together with other stimulus action by central banks, has been cited as the major reason for the recent rise on shares over the past few months. Any sign that the Fed is set to scale back the bond buying tends to lead to a share sell-off.

http://www.bbc.co.uk/news/business-22789167

maryjanell79

I was under the impression the uk avoided the worst of the triple dip in the market. Hard to say really I suspect there will be plenty more dips to come but I'm invested long term and I watch very carefully for changes, keep a diversified portfolio and switch when I have to so I'm hoping in the long run I still make a good return.

I could be wrong of course but for the time being the majority of my money is in s&s ISA and the rest is in cash and I'm not concerned right now.

pqrdef

cepheus wrote: »

The Fed is currently buying $85bn (£55bn) of bonds a month, and has said it will continue to do so until the US unemployment rate falls back.

So that's like forever then, because the Chinese will continue to dump cheap goods until they're obliged to float their currency. But we seem to keep forgetting where the root of the problem is.

This isn't new economics, it's the good old-fashioned kind.

bigadaj

pqrdef wrote: »

So that's like forever then, because the Chinese will continue to dump cheap goods until they're obliged to float their currency. But we seem to keep forgetting where the root of the problem is.

This isn't new economics, it's the good old-fashioned kind.

Very true, but the chineses are also a significant holder of both treasury bonds and dollars as foreign currency reserves. So it's a vicious circle, the Chinese are effectively working for less than they should be, but the bosses are happy to subsidise this as want the chineses leadership really fear is political unrest, and they have been pretty good at managing this so far.

cepheus

Investors are once again clamoring for a risky investment blamed for helping unleash the financial crisis: the synthetic CDO.

In a sign of how hard Wall Street is trying to satisfy voracious demand for higher returns amid rock-bottom interest rates, J.P. Morgan Chase & Co. and Morgan Stanley bankers in London are moving to assemble so-called synthetic collateralized debt obligations.

CDOs give investors a chance to bet on the creditworthiness of a basket of companies. Basic CDOs pool bonds and offer investors a slice of the pool. Synthetic CDOs pool, instead of the bonds themselves, insurance-like derivative contracts on the ..

http://online.wsj.com/article/SB10001424127887324423904578525701936124838.html

grizzly1911

cepheus wrote: »

Investors are once again clamoring for a risky investment blamed for helping unleash the financial crisis: the synthetic CDO.

In a sign of how hard Wall Street is trying to satisfy voracious demand for higher returns amid rock-bottom interest rates, J.P. Morgan Chase & Co. and Morgan Stanley bankers in London are moving to assemble so-called synthetic collateralized debt obligations.

CDOs give investors a chance to bet on the creditworthiness of a basket of companies. Basic CDOs pool bonds and offer investors a slice of the pool. Synthetic CDOs pool, instead of the bonds themselves, insurance-like derivative contracts on the ..

http://online.wsj.com/article/SB10001424127887324423904578525701936124838.html

Lets cut the coke another way. Give them hit but leave them in even a worse state than before.

Never mind the regulators won't allow it surely. they have learned their lesson so many times.

Thrugelmir

Old_Slaphead wrote: »

What happens if, instead of a 10-20% short term correction, which probably won't happen because we're all expecting it, the market stagnates or drifts lower over long timespan (ie a few years).

The market will reflect the underlying performance of its constituents. Even with a correction, there'll be winners not losers. Now is a better time to invest in particular stocks than indices. As a good stock will maintain it's value while those around it fall.

A_Flock_Of_Sheep

Just think if people were contracted to hold their investments for a minimum term say one or two years before being able to sell I wonder what sort of impact that would have on market speculators.