This is a serious question. If you were a pension fund, and you see cash at negative rates and SPX at 2% dividend yield, which would you buy? Yes, you think the market might crash like 2008, but will anyone want to bet that the market is higher 20 years from now anyway? In that case, SPX will return 2%+capital gain %.
Gotta love ZERO RISK in the SP500 = $$$
- Thread starter makloda
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This is a serious question. If you were a pension fund, and you see cash at negative rates and SPX at 2% dividend yield, which would you buy? Yes, you think the market might crash like 2008, but will anyone want to bet that the market is higher 20 years from now anyway? In that case, SPX will return 2%+capital gain %.
It is a valid question and an impossible situation for a pension fund manager. Maybe it is significantly higher in 20 years or maybe we become Japan...who really knows. In the interim, it's a pretty strong bet that the "boom/bust" cycle will continue and that is the real problem. If pension funds need to actually meet obligations and the S&P drops 30%, rallies 70%, or whatever the series might be, then how do they invest?
In all seriousness, posting like this just means you've joined the lunatic fringe of S2007S and some others ( most got tired and left after being owned from 2010-2013 ) that are essentially clueless about how the economy and markets work. The level of discourse on here has become unintelligent, superstitious, and not at all useful to investing or trading.
In 5 years, this will be very clear, just as it was going over what posters like S2007S and Nitro put on this site from 2009-2011++ and what actually happened up til now.
We are here to be enlightened by you, so since you are here too then might as well post analyses rather than ridicule
We are here to be enlightened by you, so since you are here too then might as well post analyses rather than ridicule
I second that.
Yes, could Nine_Ender enlighten us as to how his interest rate model assured him that there would be a tightening at yesterday's Fed meeting.
This is a classic politician talk, we will do this & that, but when? This way I can also say I will pay my taxes & bills whenever my financial situation improves, I will be closely monitoring it
Markets are tired of the pathetic ways the fed plays...they have now lost every ounce of credibility they once had...remember that saying "don't fight the fed"...Well this will be the first time in history you will be able to fight them and win. They are done...yesterday was what the markets wanted to hear one last time to witness that the fed is just worthless and full of lies when it comes to rates and economic forecasts...
Their public face might be damaged, but behind the scenes there is still lots that will be done. When convenient, we will still hear one of them flippantly talk about NIRP or more QE...This will never be over with...Just look at how they jawboned it down...Aug 18th, rate rise likely, market drops like a rock, culminating with Aug 24th. A few days later, rate hike off the table...market puts in the lows...Jackson Hole...one member says we should hike, another says we should NIRP...seriously, ever since I started trading, the Fed has become more and more interventionist. It used to be you'd have to watch your back with Greenspan's intra-day rate cuts (but they were once a year or so), otherwise they stayed on the sidelines...Now, you have 10 people offering all of their dissenting opinions at any given time...