Tipping, where stocks and markets go, is not an exact science. Economics and financial markets are part of the scientific circles called social sciences, and it is very difficult to understand in the head (even if you have a lot of gray substance inside the skull) – this is the behavior of people who are part of the social group called investors and speculators.
I thought the stock history was very helpful to long-term investors, and that’s despite the fact that this great investor Warren Buffett has a very bad story when it comes to investing. Buffett said, “If past history was all it takes to play for money, the richest people would be librarians.”
I agree, history is not the only factor, but even from his own investment lessons it is clear that Buffett has some respect for these lessons about money and stocks. For example, history has shown him that companies with good leadership are good businesses to invest in. And he clearly relied on history when he advised everyone who listened that one should “fear when others are greedy and greedy when others are afraid”.
Obviously, a story can get you off track. Anyone looking at AMP’s old history could have invested in the loser, though its recent bad story was actually a good clue as to what has happened to its stock price recently.
Right now the market is getting really negative, based on the history that a large rise in interest rates by central banks has led to a recession. But it is assumed that Jerome Powell from the Fed – a fool who will quickly tighten the stakes and create a recession. But what if he doesn’t do it? And what if it’s an easy recession when many companies are barely affected? And what if it means that interest rates are rising less, so the sale of technology stocks will be excessive?
Then the stock market will rise and these terrible days will be considered excessive. I bet on it. But history really shows that after a big sell-off there is a big buyout, and that’s what a long-term investor should focus on, not worry too much right now.
The “here and now” is concerned about the recession because there is no clear peak in inflation now, no Fed pause, no soft landing, no easing of blockades in China and no Russian and Ukrainian resolutions.
But many of these negative problems can be very different and more positive in two to three months.
I won’t bore you with details, but signs of a slowdown in the U.S. economy are. This could mean that the Fed is not playing such a tough game as the market with interest rates suggests. And some really smart people support my long-term positive if I think being “greedy” sooner rather than later can be helpful.
CNBC pointed to “Wall Street chief strategist Mark Kalanovich, who is holding on to his weapons amid a sharp sell-off in the market, seeing S&P 500 bounce back and finish on an equal footing ”for 2022. What does that mean? The S&P 500 started the year with a mark of 4796, so if Joe is right, we are talking about a 27% rebound!
It is JPMorgan’s chief global markets strategist at Big Apple, which ranked first in equity strategy in last year’s US Institutional Investor Survey. And here’s what he said last week: “We believe that exceeding market rates has gone too far, and the Fed will be fatally surprised compared to what is now valued on the curve.”
CNBC says the “strategist believes that investors were too pessimistic about the inflated fears of a recession, noting that the consumer remains strong amid the economic recovery.” He praises the strength of consumers in the US, the recovery / recovery of COVID-19 worldwide, including China, and the great political incentives in China.
Another respected U.S. stock market observer is Professor Jeremy Siegel of the University of Pennsylvania Wharton School. I’ve been listening to this guy for decades and he’s one of the sharpest instruments in the barn!
CNBC noted that Siegal said that investors who are buying now, “will not regret” a year after the sale on the market. “In the past, we’ve had bigger shocks, maybe another 5%, who knows, maybe another 10%, but that means for me, going forward, it’s just boosting profits in the market with impatience,” he said. “Stay there. If you have cash, start using it. In a year you will not regret it. “
He claims that the S&P 500 outperforms inflation, and given US inflation is 8.6%, this piece of history deserves attention.
“Throughout history, S&P has surpassed the CPI by 4-5% per year. So, in fact, it is well below its lag. So don’t forget in the long run, the evidence that we are going to overcome this inflation with this stock index. It lags behind its historical figures, ”he said. “There may be a downside … but let me guarantee that when it is over, S&P will be ahead of the consumer price index. It has always been so historically. “
If you want to be intimidated by headlines from people who are short-term players or media workers who need to keep up with current stories, then this is your choice. But I would prefer to rely on some really smart people and a healthy piece of market history.
This sale is an opportunity to buy for a long-term investor.