How much longer will this bear market go on for?

Type_45

Prism said:

Type_45 said:

Prism said:

If suggesting to most people that investing regularly regardless of the markets is 'egging on' then I misunderstand the phrase. Anyone with a workplace pension will be invested in the S&P500 and adding to it every month. Hardly something to discourage. 

The S&P has lost 4% since Tuesday.

Why does that matter? Might be cheaper for next months contribution

I imagine it will indeed be. 

Type_45

Oh dear...

Type_45

Stop looking at the stock market and pay attention to the bond market.

Millyonare

The UK has just about the lowest state debt in the whole G7. Kwarteng's tax budget barely added a tiny 1-3% extra to that debt (perhaps less). Thus, the run on the UK bond market is not caused by the Tories... It is caused by the Bank of England. The BoE (in effect) cut rates to expectation by -0.25% in Sep 2022, in the face of roaring inflation, and this has rattled gilts. It's broadly the same set of events as Turkey, who have also been decreasing central-bank rates as inflation increased. The BoE needs a shock-and-awe rate rise of +1% in Nov 2022, to get back on track.

Type_45

Some of these look attractive.  Does anyone here on iWeb have bonds?  

Type_45

Millyonare said:

The UK has just about the lowest state debt in the whole G7. Kwarteng's tax budget barely added a tiny 1-3% extra to that debt (perhaps less). Thus, the run on the UK bond market is not caused by the Tories... It is caused by the Bank of England. The BoE (in effect) cut rates to expectation by -0.25% in Sep 2022, in the face of roaring inflation, and this has rattled gilts. It's broadly the same set of events as Turkey, who have also been decreasing central-bank rates as inflation increased. The BoE needs a shock-and-awe rate rise of +1% in Nov 2022, to get back on track.

Raising rates will choke an already-imploding economy.

Swipe

Remind you of anyone?

Type_45

Bank of England doubles its quantitative easing bond purchases to £10 billion per day

https://www.bbc.co.uk/news/business-63211743?at_custom3=@BBCBreaking&at_campaign=64&at_custom2=twitter&at_custom4=363CA4D0-4930-11ED-BA51-49820EDC252D&at_medium=custom7&at_custom1=[post+type]

Type_45

Even buying the inflation-linked bonds.

Millyonare

Type_45 said:

Millyonare said:

The UK has just about the lowest state debt in the whole G7. Kwarteng's tax budget barely added a tiny 1-3% extra to that debt (perhaps less). Thus, the run on the UK bond market is not caused by the Tories... It is caused by the Bank of England. The BoE (in effect) cut rates to expectation by -0.25% in Sep 2022, in the face of roaring inflation, and this has rattled gilts. It's broadly the same set of events as Turkey, who have also been decreasing central-bank rates as inflation increased. The BoE needs a shock-and-awe rate rise of +1% in Nov 2022, to get back on track.

Raising rates will choke an already-imploding economy.

It is important not to get dragged into the emotional knee-jerk hysteria driven by the clickbait frenzy of the often loss-making British media.

The UK economy grew at a healthy +4% YoY in Q2 2022.

UK unemployment sits today at 3.5%, just about the lowest rate in recorded history.

The UK economy has plenty of headroom for more rate rises, to bring inflation and market-panic back under control. Just a handful of rises is all it needs, and then they can start coming down again.