Effects of inflation

mrlegend123

Chickereeeee said:

mrlegend123 said:

Notepad_Phil said:

mrlegend123 said:

When the S and P 500 is at an all-time high, it is time to stockpile cash.......inflation or not 
People who think the markets will go to the moon are crazy....buy the dip, correction or crash

Being at an all-time high is not a reason in itself to stockpile cash - markets are frequently at or close to all-time highs and you'd miss out on much of a markets gains if you refused to invest just because they've reached an all-time high.

Wrong when you use CAPE, the markets work in cycles. No-one invests at the top with high CAPE - mad. 

If no one invested when CAPE  was high, markets would fall and CAPE would be low. So someone - an awful lot of people - ARE investing.

The high CAPE value indicates that U.S. stocks have become extremely expensive..... crack on if you want to buy expensive stocks caused by too many investors resulting in possible inflation? 

mrlegend123

Deleted_User said:

mrlegend123 said:

OK... High inflation over the summer resulting in lower US markets by the end of the year.

Does everybody know about this high inflation over the summer? If they do, it's already accounted for in shares prices. If they don't, why are you so sure it will happen? Markets are moved by news - things people didn't know was going to happen. You don't know what that news will be, and neither do the so-called experts. (Some of them are real experts about some things, but not about predicting the short-term direction of the stock market.)

Secondly, unexpectedly high inflation doesn't necessarily make the stock market fall. True, the markets don't like higher interest rates, which might follow higher inflation (but would they follow, this time?). But there are always other factors, e.g. the inflation might be caused by a stronger recovery than expected, which would be positive for shares prices. So the overall effect on prices is not at all obvious.

I rather listen to them than people on here.... arm chair experts! 

I'd suggest listening to this guy instead: https://www.youtube.com/watch?v=A0gQiz0pCyI

I agree with your clip - true.

Stock markets always go up/down when data is released that day... stock markets work on expections. 

Prism

mrlegend123 said:

Prism said:

mrlegend123 said:

Prism said:

mrlegend123 said:

no Deleted_User said:

mrlegend123 said:

Wrong when you use CAPE, the markets work in cycles. No-one invests at the top with high CAPE - mad. 

Sorry, that is simply wrong. Somebody who has a large lump sum to invest should crack on an invest right away. Perhaps with an asset allocation which has been tweaked a bit because of the high CAPE. But just staying in 100% cash in the hope of a better buying opportunity which may never come makes no sense.

I didn't say I was in 100% cash....... don't invest in a high CAPE Market.

So you have sold out of all of your US investments? Where did you shift them?

no just stopped investing in the US markets for now. 

Ok that means you are invested in US markets and yet you are telling people they are mad to invest in US markets. Hmm

like I said many times....i have stopped investing in the US markets due to CAPE. want me to repeat the above for you hmm

Right, I am with you. You are in fact invested in US markets but are not investing any more money in US markets. Yet you are suggesting to everyone else that they shouldn't invest in them due to a high price even though you don't have enough conviction to sell your US holdings. Perfectly clear.

mrlegend123

Prism said:

mrlegend123 said:

Prism said:

mrlegend123 said:

Prism said:

mrlegend123 said:

no Deleted_User said:

mrlegend123 said:

Wrong when you use CAPE, the markets work in cycles. No-one invests at the top with high CAPE - mad. 

Sorry, that is simply wrong. Somebody who has a large lump sum to invest should crack on an invest right away. Perhaps with an asset allocation which has been tweaked a bit because of the high CAPE. But just staying in 100% cash in the hope of a better buying opportunity which may never come makes no sense.

I didn't say I was in 100% cash....... don't invest in a high CAPE Market.

So you have sold out of all of your US investments? Where did you shift them?

no just stopped investing in the US markets for now. 

Ok that means you are invested in US markets and yet you are telling people they are mad to invest in US markets. Hmm

like I said many times....i have stopped investing in the US markets due to CAPE. want me to repeat the above for you hmm

Right, I am with you. You are in fact invested in US markets but are not investing any more money in US markets. Yet you are suggesting to everyone else that they shouldn't invest in them due to a high price even though you don't have enough conviction to sell your US holdings. Perfectly clear.

Good that you are with me on not investing more money in the US markets. I never said sell US holdings....I said I wouldn't invest more in the US market due to high CAPE. 

I said I have stopped investing in the US markets and not selling. Instead, I am using the cash to put into the money markets. I still hold other investments and not selling them...... next assumption, please. 

Prism

mrlegend123 said:

Prism said:

mrlegend123 said:

Prism said:

mrlegend123 said:

Prism said:

mrlegend123 said:

no Deleted_User said:

mrlegend123 said:

Wrong when you use CAPE, the markets work in cycles. No-one invests at the top with high CAPE - mad. 

Sorry, that is simply wrong. Somebody who has a large lump sum to invest should crack on an invest right away. Perhaps with an asset allocation which has been tweaked a bit because of the high CAPE. But just staying in 100% cash in the hope of a better buying opportunity which may never come makes no sense.

I didn't say I was in 100% cash....... don't invest in a high CAPE Market.

So you have sold out of all of your US investments? Where did you shift them?

no just stopped investing in the US markets for now. 

Ok that means you are invested in US markets and yet you are telling people they are mad to invest in US markets. Hmm

like I said many times....i have stopped investing in the US markets due to CAPE. want me to repeat the above for you hmm

Right, I am with you. You are in fact invested in US markets but are not investing any more money in US markets. Yet you are suggesting to everyone else that they shouldn't invest in them due to a high price even though you don't have enough conviction to sell your US holdings. Perfectly clear.

Good that you are with me on not investing more money in the US markets. I never said sell US holdings....I said I wouldn't invest more in the US market due to high CAPE. 

I said I have stopped investing in the US markets and not selling. Instead, I am using the cash to put into the money markets. I still hold other investments and not selling them...... next assumption, please. 

Its a terminology thing then. I also haven't invested anything new into the US markets for several years now but I am still heavily exposed to them and would say that I invest in the US if anyone asked me. The difference between new money and previous money isn't relevant as far as I am concerned. My contributions are relatively insignificant to the whole anyway.