Sarenco would you agree that investors today will have to deal with much more volatility and turbulence than before. I know the last few years were relatively calm. But we have had 2 big crashes in the last 15 years and now maybe a third one. With all the information people have access to its much more tempting to react to it especially when markets now frequently have above 3 percent daily moves which was a rarity before electronic trading.
Japan, now negative interest rates, will the ECB be next to bring it in if they can't lift the euro economy. Where will people put their money now, it will cost you to hold cash.
So after all the money printing european equities are still overvalued after doing nothing for 10 years!! Surely the risky asset in that scenario is cash and not equities since cash has been consistently devalued but yet people still wish to hold onto cash. If equities are overvalued then what are they overvalued against hardly cash. Even the bond market has doubled in the last 10 years yet total equity capitalization has not changed in 10 years. If there is another sell off is it not ridiculous to dump equities for an asset that is being consistently devalued.maybe they will invest in equities ( after equities have a very significant correction ) , the european financial index is now not far above where it was in the depths of the financial crisis , stocks in europe have not done much with QE or low interest rates , maybe pepople still think they are too expensive
a repricing of assets might be on the cards , would tie in with this enviroment of deflation
So after all the money printing european equities are still overvalued after doing nothing for 10 years!! Surely the risky asset in that scenario is cash and not equities since cash has been consistently devalued but yet people still wish to hold onto cash. If equities are overvalued then what are they overvalued against hardly cash. Even the bond market has doubled in the last 10 years yet total equity capitalization has not changed in 10 years. If there is another sell off is it not ridiculous to dump equities for an asset that is being consistently devalued.
Now the US dollar reverses and weakens 4 percent in just 2 days. It doesn't look like they are going to raise interest rates after all. So now the US dollar is correcting , so where is the "next safe haven". If everything is correcting then maybe nothing is.
and my new portfolio which includes gold related products including physical gold and gold/silver royalty companies like RGLD, FNV, SLW are doing well. I have taken a huge gamble on gold
Does golds rise mean the dollar bull market is over for now and no interest rate rises, maybe relief for emerging markets and commodities. The world is really mixed up everyone talking about deflation yet a rush back into gold the traditional inflation hedge. Yet no real inflation as oil and commodities on the floor.
Inflation is often described as an expansion of the money supply.
I believe QE 4 could potentially lead to serious inflation or hyperinflation. Great for gold!!
Dont know why there has been such a big rise in stock markets the last few days on little news. It just shows you how ridiculous it is to try and put reason to it. Maybe things might calm down for a while now that they have got the hissy fit out of the way.