With stock indexes backed by the gov't i'd think future returns much lower

[hafez50]

Safe cd's and treasury's yield under 1%. Why would stock indexes that are backed by the gov't yield 10% plus in the yrs to come ? The price for safety and guarantees is much lower returns.We've taken risk and capitalism out of the mkt and there's a price to pay for that . High risk high potential returns and low risk low returns .

 

[Fx-Game]

Safe cd's and treasury's yield under 1%. Why would stock indexes that are backed by the gov't yield 10% plus in the yrs to come ? The price for safety and guarantees is much lower returns.We've taken risk and capitalism out of the mkt and there's a price to pay for that . High risk high potential returns and low risk low returns .

Short bonds ... one day.

 

[Clubber Lang]

Safe cd's and treasury's yield under 1%. Why would stock indexes that are backed by the gov't yield 10% plus in the yrs to come ? The price for safety and guarantees is much lower returns.We've taken risk and capitalism out of the mkt and there's a price to pay for that . High risk high potential returns and low risk low returns .

Disagree
With the Fed backstopping everything it’s high returns with low (maybe even no) risk.

If anyone here was trading back in 1999 this is exactly what it was like.
Green every single day.
Multiple shit companies going up 100-200% everyday.
People sitting at home on etrade (now Robinhood) making money hand over fist thinking the market is easy.
Any stock mentioned by CNBC talking heads immediately starts ripping.

The Fed has completely removed all fear of market losses.
Moral hazard on steroids

 

[hafez50]

Disagree
With the Fed backstopping everything it’s high returns with low (maybe even no) risk.

If anyone here was trading back in 1999 this is exactly what it was like.
Green every single day.
Multiple shit companies going up 100-200% everyday.
People sitting at home on etrade (now Robinhood) making money hand over fist thinking the market is easy.
Any stock mentioned by CNBC talking heads immediately starts ripping.

The Fed has completely removed all fear of market losses.
Moral hazard on steroids

We'll see . We did get some disobedience against the fed 3 times in march when they threw the kitchen sink at this and we ran then tanked big 3 times . I still say the experiment blows up .

 

[Sig]

We'll see . We did get some disobedience against the fed 3 times in march when they threw the kitchen sink at this and we ran then tanked big 3 times . I still say the experiment blows up .

Well it blew up in 2000 as well, so I think you're ultimately both agreeing with one another.

 

[morganist]

Safe cd's and treasury's yield under 1%. Why would stock indexes that are backed by the gov't yield 10% plus in the yrs to come ? The price for safety and guarantees is much lower returns.We've taken risk and capitalism out of the mkt and there's a price to pay for that . High risk high potential returns and low risk low returns .

I think there will be migration into corporate bonds. I wrote about it on another thread I will link to the article I wrote below. Basically they give a better return for secure fixed returns.

http://morganisteconomics.blogspot.com/2019/11/money-migration-low-fed-interest-rates.html

You can't really go wrong with AAA rated corporate bonds. You will at least get your money back and the returns are good. Rio Tinto look pretty good.

 

[Nine_Ender]

Well it blew up in 2000 as well, so I think you're ultimately both agreeing with one another.

Nothing about this situation is similar to year 2000. This is the problem some of you have, your bearings are totally screwed up there was no bubble in January. Given that context, the rebound while likely overdone given virus impact is not a surprise.

 

[bone]

Oh the black swans and the twists and the turns.

Who’d have thought that protests and riots would have ended COVID ?

 

[morganist]

Oh the black swans and the twists and the turns.

Who’d have thought that protests and riots would have ended COVID ?

There might a be second or third wave so it COVID might come back again.