|home | Stocks and Bonds|
Stocks and Bonds
This section is for people who are still undecided between stocks and bonds, foreign and domestic.
The American stock market peaked in March of 2000. If we use to S&P 500 index, the peak was 1527. That was on March 24, 2000.
Since that time, price inflation has increased by over 20%. The index should be above 1850. But that does not count capital gains taxes. To sell for what you paid, the index should be at 2200.
Then there is the beloved story of the American stock market's supposed gain of 7% per year. That much-heralded fairy tale got blasted by the twenty-first century.
I received the following e-letter piece of information in a widely read free e-letter:
But our main focus will always be about stock market investing. Why? Because nothing has performed better than equities over the long haul. Not cash, not bonds, not real estate, not gold, not collectibles, nothing.
Anyone who believed this in 2000 and left his money in a no-load U.S. stock index fund -- the smart investors' strategy -- has lost money. He should have had his money in gold and silver, real estate, and bonds.
This old line about the profitability of American stocks has been dead wrong for almost eight years. Yet the perma-bulls keep promoting this story as if nothing had happened to refute the theory since March of 2000. They simply will not learn from experience. They will never change their story.
I suggest that you read this article: How to Short the Various U.S. Stock Markets It's available to members of this site.
Foreign stocks have done well. Will this continue?
Then there are bonds, which usually move up when stocks move down. What about corporate bonds? What about government bonds? Which maturities? Which governments?
What effect will Federal Reserve policy have on American stocks and bonds?
These and other topics are covered here.
Low job formation means a stock market increase. Why? keep reading
Do not be misled on this. There is a lot of bad information out there. keep reading
This is the issue of economic cause and effect. The gun is loaded. The hammer is cocked. Who will pull the trigger? keep reading
The debate is dividing the hard-money camp. keep reading
Reading the FED's tea leaves is a cottage industry. keep reading
I watched the wild ride of the DJIA. Incredible. keep reading
Their faith never wanes. Here is today's example. keep reading
China is moving toward recession. The central bank is in panic mode. keep reading
The Federal Reserve has created an enormous illusion. Millions of middle-class Americans have bought into it. So have the rich. keep reading
If you don't understand it, don't worry about it. It probably is not worth understanding. keep reading