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Albert04 07-12-2009 13:49

Should You Buy Stocks
Should You Buy Stocks, Bonds, or Gold?
We witnessed a rather extraordinary confluence of events: The Dow stormed to a 13-month high while gold reached another record high (in nominal terms). Meanwhile, the ratio of bids to amount offered in $40 billion three-year Treasury note auction was the highest since 1990, pushing the yield on the issue down to 1.40%. Why is this unusual, and what does it mean for investors?
A rare correlation
Last few days events highlight a period in which stocks, gold, and government bonds have been positively correlated -- i.e., all three have been rising simultaneously -- which is highly unusual. The probable culprit behind this state of affairs is the Fed, which has flooded the system with money through bond purchases and lowered short-term interest rates to zero. As a result, investors are frantically seeking yield or the promise of capital appreciation wherever they can find it. They would rather take unconsidered risk than earn nothing while they sit on their hands.
When will it break down?
What would it take for this Neverland market, in which all assets go up, to break down? The fear of a rate rise could do the trick. Last week, the Fed explicitly identified inflation expectations as one of three factors it is monitoring in deciding when to raise rates. The market-implied expected inflation rate, based on Treasury bond and inflation-protected Treasury security prices, reached 2.22% annually over the next 10 years -- the highest figure in over 14 months.
What to hold when the cards are laid down
Once the correlation breaks down, what should investors be holding in their portfolios: The SPDR S&P 500 ETF (NYSE: SPY), SPDR Gold Shares (NYSE: GLD), or T-bonds? As a value-driven investor, I can't recommend buying the S&P 500 or T-bonds in this environment; both look overvalued. As for gold, some exposure is useful as an inflation hedge. Beyond this, investors who can drill down and focus on individual stock names will reap the rewards. High-dividend payers such as Pitney Bowes (NYSE: PBI), Eli Lilly (NYSE: LLY), Bristol-Myers Squibb (NYSE: BMY), or Kraft (NYSE: KFT) might fit the bill,

PapiaKhatunAsha 17-09-2020 18:59

Re: Should You Buy Stocks
Trading on the only stock market it won't be a good idea since here we can't make money from both buy and sell option so I think better in Forex trading where we can make money in every stage so to get started trading Forex we might easily choose FreshForex broker as there deposit method is always instant.

mlawson71 05-11-2020 17:07

Re: Should You Buy Stocks
Thankfully the FCA has made it a little easier to trade stocks despite Brexit. They will allow for UK stock market participants to access EU stock markets following the same rules as before Brexit.

BubbleGum 06-11-2020 09:29

Re: Should You Buy Stocks
Stocks offer the potential for higher returns than bonds but also come with higher risks. Bonds generally offer fairly reliable returns and are better suited for risk-averse investors.

PapiaKhatunAsha 13-11-2020 21:25

Re: Should You Buy Stocks
Basically Success in forex depends on your technical analysis and fundamental analysis. In the stock market you can easily gain if you have great knowledge over TA and FA. So, trading in both sectors is almost the same. You can buy and sell stock also if you want. FreshForex is one of the great places where I can learn and invest in forex. Also, I can buy and sell stocks with the given knowledge by FreshForex.

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