Stock Market going into 2021

[BLADEMDA]

This time of year, September/October, has been a rough time for the stock market. The run-up through the summer is now in correction phase. With valuations still high the sell-off isn't finished yet. In addition, a Biden win is likely so that will put pressure on stocks in the short term. I suspect a lot of nervous investors will be sellers this Fall and winter.

I do think 2021 looks promising for another 10% gain in the market once things settle down in January/February. Yes, Biden will be increasing corporate taxes and person capital gains but the market will factor those in after he wins in November.

For those that missed out on the last massive run another opportunity will likely present itself again very soon.

https://www.cnbc.com/2020/09/21/sp-500-paces-for-worst-september-since-2011-what-to-watch-now.html

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[BLADEMDA]

https://www.cnbc.com/2020/09/21/bidens-capital-gains-tax-hike-may-big-sell-off-in-stocks-.html

POINTS

• Democratic presidential nominee Joe Biden’s plan to increase the capital gains tax could lead to a large-scale sell-off of stocks, according to economic analyses.
• Biden has proposed increasing the top tax rate for capital gains for the highest earners to 39.6% from the current top rate of 23.8%, the largest real increase in capital gains rates in history.
• Yet economists say the stock market as a whole wouldn’t necessarily fall just because of the tax increase.

 

[BLADEMDA]

 

[deleted126335]

 

[BLADEMDA]

With interest rates at historic lows, levels I have never seen before, investors have few options to make money. Dividend paying stocks, value stocks and high growth tech stocks will still attract new money. Nothing has changes except the market got ahead of itself. Fear is higher these days due to Covid 19 and our mess in Washington.

The stock market is still a buy so major corrections should be bought not sold. For those with a long time horizon this is just noise but for some of us with shorter time frames these sell-offs are opportunities to invest money earning almost nothing in CDs or savings accounts into good companies with decent yields selling at fair market valuations.

 

[BLADEMDA]

In the meantime, more of the relief efforts, such as the Federal Emergency Management Agency funds Trump tapped to send extra unemployment benefits and the moratorium on layoffs by airlines, are likely to expire. Powell, when asked again during his press conference about the need for fiscal stimulus, painted a more explicit picture of what the path of the economy could be if there isn’t more federal help.

“So far the economy has proven resilient to the lapsing of the Cares Act enhanced unemployment benefits, but there’s certainly a risk though that those who are unemployed appear to have saved some of those benefits and they’ll now spend them,” Powell said. “And as the months pass, if there’s no follow up on that, if there isn’t additional support and there isn’t a job for some of those people in the industries where it’s going to be very hard to find new work, then it’s going to show up in economic activity. It will also show up in things like evictions and foreclosures, things that will scar and damage the economy.”

Bankers, experts warn of economic pain as CARES Act cash dwindles

Fed Chair Jerome Powell warned that there would be a rise in "things that will scar and damage the economy" if there was not more fiscal stimulus.

www.cnbc.com

 

[Direct Laryngoscopy]

Unfortunately I believe we’re on the cusp of the Big Short and the start of a Depression. I’m not fighting the Fed and their infinite cash. We could see 3600-4000 S&P, but I think the reality of the economy will take hold and this federal reserve injected rally will slow and the market will roll over. Buffet sees what’s coming and he pulled my money out of bank stocks, sold his airline stocks (at a loss), and made a move into gold mining (he’s been anti precious metals forever) and into Japan.

Personally I think the cronyism we’ve experienced the last 2 decades with bailouts and faux free capitalism has led to the mess we’re in presently. So many zombies companies being propped up by corporate welfare, share buy backs and outright fraud (wire card, nikola and Tesla to name a few). Covid exposed the Ponzi and now the treasury and central banks can’t conceal their activity. I’m hopeful things work out smoothly, but realistically I think we have some rough days ahead. It’s not just the market I’m worried about. Society as a whole is teetering, and with race relations, sky high unemployment, massive bankruptcies, unstable government, and oh yeah a pandemic that could potentially could cause another deflationary event, I think we should be prepared for anything.

 

[NontradCA]

 

[deleted682700]

Carl at gold website . Karl Denninger?
Ban cash, credit becomes the money. The Federal Reserve, along with Fractional Reserve Banking, become instantly obsolete. If the ban on cash extends globally, all central banking, the ECB, the BIS, the IMF, all of it would be rendered obsolete as well. No government anywhere will have to borrow or tax to pay their bills ever again, as the very act of writing and depositing a government check creates the 'payment in full'.

Of course, if they want digital/credit money to retain any semblance of value, then they would also have to ban a bank's ability to create credit, and they may have to include Wall Street in that credit creation ban as well
egative interest rates and funny/fake economy there is no need for cash (Convenient Covid vector), we can now clamor to shut

But what happens to my deposits? The banks can use it to bail themselves out , Cyprus bail-in

Everything You Need to Know About the Cyprus Bank Disaster

Taxing insured bank deposits is the worst way to pay for the bailout.

www.theatlantic.com

 

[Volatile]

As someone who is not retiring in the next 20years, I have been hopeful for a nice long dip in the market. It be great to get at least 5-10 years of buying on sale, we’ll see, fingers crossed!

 

[deleted126335]

As someone who is not retiring in the next 20years, I have been hopeful for a nice long dip in the market. It be great to get at least 5-10 years of buying on sale, we’ll see, fingers crossed!

That sounds great in theory. In practice, the world of prolonged low stock prices is often a world of nervousness where people are less inclined to take risks, a world of lower employment, less secure incomes, and family members often needing assistance. Not for everyone, but for lots of folks.

 

[Mad Jack]

The market is wildly overvalued. The fundamentals don't make any sense and that's a good sign of a bubble

 

[IlDestriero]

Unfortunately I believe we’re on the cusp of the Big Short and the start of a Depression. I’m not fighting the Fed and their infinite cash. We could see 3600-4000 S&P, but I think the reality of the economy will take hold and this federal reserve injected rally will slow and the market will roll over. Buffet sees what’s coming and he pulled my money out of bank stocks, sold his airline stocks (at a loss), and made a move into gold mining (he’s been anti precious metals forever) and into Japan.

Personally I think the cronyism we’ve experienced the last 2 decades with bailouts and faux free capitalism has led to the mess we’re in presently. So many zombies companies being propped up by corporate welfare, share buy backs and outright fraud (wire card, nikola and Tesla to name a few). Covid exposed the Ponzi and now the treasury and central banks can’t conceal their activity. I’m hopeful things work out smoothly, but realistically I think we have some rough days ahead. It’s not just the market I’m worried about. Society as a whole is teetering, and with race relations, sky high unemployment, massive bankruptcies, unstable government, and oh yeah a pandemic that could potentially could cause another deflationary event, I think we should be prepared for anything.

My friend’s company buys distressed companies to dissolve in the short term or rebuild in the short to mid term 5-15 years. He’s had a catastrophic year. The only thing keeping them afloat has been tens of millions in bailout money. They just walked away from a restaurant chain and they’re considering selling off their regional airline for “parts” at a huge loss. Of course some of the businesses are still doing fine. He thinks things are going to get much worse and is looking at just retiring to his ranch instead of dealing with the aftermath, BUT there will be new opportunities to buy new distressed companies to rebuild and break up. He said his investors are delusional and they are looking at losing a lot of their money because there’s no way to salvage the remains of many of their holdings. For example they have millions of unpaid rent on office space, etc. That bill will be coming due eventually, and the landlords aren’t going to take an IOU from a company on life support, and the holding company isn’t going to pick up the tab. That’s why they walked away from the restaurant chain, it will never get out of debt. All these propped up things are already dead, we just don’t know it yet.

 

[deleted126335]

My friend’s company buys distressed companies to dissolve in the short term or rebuild in the short to mid term 5-15 years. He’s had a catastrophic year. The only thing keeping them afloat has been tens of millions in bailout money. They just walked away from a restaurant chain and they’re considering selling off their regional airline for “parts” at a huge loss. Of course some of the businesses are still doing fine. He thinks things are going to get much worse and is looking at just retiring to his ranch instead of dealing with the aftermath, BUT there will be new opportunities to buy new distressed companies to rebuild and break up. He said his investors are delusional and they are looking at losing a lot of their money because there’s no way to salvage the remains of many of their holdings. For example they have millions of unpaid rent on office space, etc. That bill will be coming due eventually, and the landlords aren’t going to take an IOU from a company on life support, and the holding company isn’t going to pick up the tab. That’s why they walked away from the restaurant chain, it will never get out of debt. All these propped up things are already dead, we just don’t know it yet.

True, but the people who will be buying those things are the current 1% mostly top 0.1-0.5%. They are the ones who have oodles of reserves and the current financial devastation has been but a scratch, (the ones who aren't over leveraged any way).

This will accelerate the social discord of this country. Accelerating wealth inequality is a cancer on this country that is about to get worse.

Think of all the RNs and CRNAs that you know at work whose spouse was layed off. There are likely to be more of them soon.

 

[partydoc]

I'm sick of individual stocks. I'll just be dollar cost averaging into VTI

 

[sethco]

I'm sick of individual stocks. I'll just be dollar cost averaging into VTI

Nothing wrong with average market returns. On a physician salary, that is more than adequate to hit your financial goals assuming a good savings rate

 

[Shimmy8]

I’m realistically 25-30 year from retirement. Not touching anything in 401k, HSA, IRA, or taxable. Index funds across the board. Just hoping my company keeps contributing!

 

[nimbus]

The market is wildly overvalued. The fundamentals don't make any sense and that's a good sign of a bubble

That’s been true for the past 5 years.

 

[Mad Jack]

That’s been true for the past 5 years.

And even more true as of late, it is shocking how disconnected the market is from underlying revenues, profit, and growth

 

[sethco]

That’s been true for the past 5 years.

“the markets can remain irrational longer than you can remain solvent.”

-John Maynard Keynes

 

[deleted126335]

And even more true as of late, it is shocking how disconnected the market is from underlying revenues, profit, and growth

You print trillions it has got to go somewhere. You drive interest rates to zero...negative in real terms, it will drive more into stocks. I am standing pat on my fixed income and eating it. There are absolutely massive inflationary and massive deflationary pressures simultaneously. No idea how it is going to turn out.

 

[pgg]

As someone who is not retiring in the next 20years, I have been hopeful for a nice long dip in the market. It be great to get at least 5-10 years of buying on sale, we’ll see, fingers crossed!

Careful what you wish for

I'm sure there were people saying the same thing in 1990 Japan. It's been 30 years. Take a look at what the Nikkei has done in that time.

 

[Volatile]

Careful what you wish for

I'm sure there were people saying the same thing in 1990 Japan. It's been 30 years. Take a look at what the Nikkei has done in that time.

Again, not hoping for a Great Depression lmao. But a nice dip/market correction for a few years will do just fine

 

[BLADEMDA]

• The stock market is “looking forward to a really good 2021 no matter who is president,” Wharton School professor Jeremy Siegel told CNBC on Monday.
• Siegel said that increased liquidity and an improvement in the coronavirus pandemic are likely to boost stocks next year.
• However, Siegel said that without a new stimulus package and election uncertainty, it may be hard for Wall Street to breakout much more before the November election.

The FED is creating an environment for a boom in the market likely 20% higher in 2021. This is due to artificially low interest rates leaving few options for investors.

Is this a bubble? Yes. When will it burst/pop? Not in 2021 so be a buyer not a seller on market corrections prior to and right after the election.

 

[deleted682700]

start viewing at about 4 minutes

Individual investors can wish whatever we want, everything depends on institutional investors. GE , deutshe bank are all on life support. No way will be able to even pay 2% interest? May be it’s a good fed strategy to keep this zombies in suspended animation till they have some chance of being sold in pieces Or let the pension funds sell these stocks that cannot catch a bid