Is the stock market over heating?

Glen_Clark

cepheus wrote: »

So where did the Japanese put their money after their asset bubble?

Abroad I guess.
The Government seems to think if they print money it will be invested in Britain and get the economy going. They don't seem to realise they have to make Britain investable first or the money will just be invested abroad. So now we have a trashed currency, a credit rating downgrade, an asset price bubble, and an economy on its knees.:(

sabretoothtigger

Japan self funded their QE, thats why they were able to drag on the mistake of big government over spending for so long.
The idea now is that people will flee the dollar because on average USA population does not have the wealth or ongoing productive exportable value Japan does, ditto UK.

Hence lower currency value, higher import costs and probably a worse economy

too much money chasing too little value

Because of the above and FTSE stocks value foreign companies but in a British price, its likely stock prices undervalue those assets long term

TCA

Barcap wrote: »

there will be no big crash now for at least 20 years, the world cant take it, were still in the **** now, think what would happen if 2008/9 happened again (Europe would be finished. period) the ELITE wont allow it.

Interesting. Given I reach retirement age in about 20 years I should perhaps consider putting all my surplus cash into the stock market today in a lump sum, rather than waiting for a drop that might never happen. Nah, think I'll continue to drip-feed. Not got the b*lls to go all in!

sabretoothtigger

Gradual is much better, worked for me in May 2008 to do monthly over the next year

think what would happen if 2008/9 happened again

We should exceed 2008 in volatility and 'surprise' factor. Lehmans was just a private company, they took that risk and put it into central banks now.
It stands to reason we will see greater fallout if that was a mistake

the ELITE wont allow it.

http://www.youtube.com/watch?feature=player_detailpage&v=XeZapfP8Q6w#t=44s

steampowered

The FTSE100 is looking like very good value right now. A lot of very strong companies with excellent balance sheets and high yields going for cheap valuations.

Glen_Clark

steampowered wrote: »

The FTSE100 is looking like very good value right now. A lot of very strong companies with excellent balance sheets and high yields going for cheap valuations.

On the face of it Certainly. But thats all down to negative real interest rates. What when interest rates normalize and these companies have to pay more to borrow?
Some of them are selling to customers who are skint.:eek:
The more you look into it, the more confused you get

innovate

please all spambomb timberstocks

Yorkie1

Now the spammer's name is indexbio; please click spam.

coastline

USA continues to add jobs...this should hold the upward trend since 2009..

http://www.marketwatch.com/story/us-economy-creates-195000-jobs-in-june-2013-07-05?dist=beforebell

marathonic

Looks like we're on the road uphill again having made up about 50% of the total drop from peak.

I've been back fully invested since June 13th but, as I noted in the bond divergence from shares thread earlier, I've taken my first interest in bonds.

I'm 100% equities now and, to be honest, see equities surpassing their previous high of the year. However, given that equities have outperformed bonds by about 20% year-to-date, I'll be keeping a close eye on things.

As noted by princeofpounds in that thread, this divergence doesn't necessarily mean that bonds are good value as it all depends on the starting point.

bowlhead99 also makes a good point about having a portion invested in bonds so that you can reallocate to stocks if stocks drop 40% whilst bonds only drop half of that.

The problem is, stocks could rise by another 30% before that happens. Hence the difficulty in market timing.

I think I'll consider bonds if they drop to a level where I would consider them only 'slightly overvalued'. In the near term, I don't see any catalyst that will cause them to rise.