Investing Strategies. What is your move?

Point is, hysteresis. DOWN and big down, then up for easy free money then down................but has it been two years since climbing out? No. We climbed out and oops...................
Had to look up hysteresis: https://www.investopedia.com/terms/h/hysteresis.asp
"Hysteresis in the field of economics refers to an event in the economy that persists even after the factors that led to that event have been removed or otherwise run their course. Hysteresis often occurs following extreme or prolonged economic events such as an economic crash or recession. After a recession, for example, the unemployment rate may continue to increase despite growth in the economy and the technical end of the recession."

We may have climbed up a few rungs, but never out. And, the pandemic has not run it's course yet, as the above definition describes. Other countries that are big suppliers to the U.S. are still locking down. The perfect storm is still building.

Do any armchair quarterbacks here have a solution?
 
^^^ Look at those graphs. The market grew more in the 21 months AFTER the "economy shutdown" (Mar 20 to Dec 21 - NOT including the 3 month down turn from Jan-Mar 20) than it did from mid 2017 to the start of the pandemic (Jan 20). Crazy, right? There was a DOW gain around 6750 from mid 2017 to Jan 2020, and there was a gain of 7900 in the DOW between the end of the "economy shutdown" to Dec 2021.

Maybe we should "shut down" the economy more often. 😄
As people say the market is not the economy.

So market overshot. Now back....
 
As people say the market is not the economy.

So market overshot. Now back....
One heck of an "overshoot" ... 21 months of market growth after a pandemic hits and the economy was shut down for a short time. Markets are crazier these days then ever before. It's a psychotic monster that becomes out of control sometimes.
 
Had to look up hysteresis: https://www.investopedia.com/terms/h/hysteresis.asp
"Hysteresis in the field of economics refers to an event in the economy that persists even after the factors that led to that event have been removed or otherwise run their course. Hysteresis often occurs following extreme or prolonged economic events such as an economic crash or recession. After a recession, for example, the unemployment rate may continue to increase despite growth in the economy and the technical end of the recession."

We may have climbed up a few rungs, but never out. And, the pandemic has not run it's course yet, as the above definition describes. Other countries that are big suppliers to the U.S. are still locking down. The perfect storm is still building.

Do any armchair quarterbacks here have a solution?
Inflation inflation inflation. Did I mention inflation?
  1. Supply Chain
  2. Oil Prices
Of course #2 has a big effect on #1...
These are worldwide problems. And another pandemic flare up would be a huge setback. Look at Shanghai...
 
Look at those graphs. 😄
And look at these graphs. This is just out today.

The Federal Reserve's balance sheet ballooned following its announcement to carry out quantitative easing to increase the liquidity of U.S. banks. The balance sheet of the Federal Reserve reached around 8.92 trillion U.S. dollars as of May 31, 2022. This measure was taken to increase the money supply and stimulate economic growth in the wake of the damage caused by the COVID-19 pandemic. The Federal Reserve was not the only institution that implemented an expansionary monetary policy in response to the pandemic. For instance, also the European Central Bank expanded its money supply in March 2020, and kept doing so over the following months.

https://www.statista.com/statistics/1121416/quantitative-easing-fed-balance-sheet-coronavirus/
 
And look at these graphs. This is just out today.

The Federal Reserve's balance sheet ballooned following its announcement to carry out quantitative easing to increase the liquidity of U.S. banks. The balance sheet of the Federal Reserve reached around 8.92 trillion U.S. dollars as of May 31, 2022. This measure was taken to increase the money supply and stimulate economic growth in the wake of the damage caused by the COVID-19 pandemic. The Federal Reserve was not the only institution that implemented an expansionary monetary policy in response to the pandemic. For instance, also the European Central Bank expanded its money supply in March 2020, and kept doing so over the following months.

https://www.statista.com/statistics/1121416/quantitative-easing-fed-balance-sheet-coronavirus/
So more money was made available for people to take loans on to "keep going" ... but maybe everyone invested their borrowed money into the stock market and artificially made the market have the biggest gain in 21 months after the 3 month market drop, instead of making the "real economy" on the streets come back.

From the article it also mentioned:
" Overall, the gross domestic product (GDP) of the United States decreased by roughly 2.2 percent in 2020. However, in 2021, it increased by more than ten percent to almost 23 trillion U.S. dollars."

The GDP 2.2% drop in 2020 was most likely from the "economy shutdown" ... but what's the reason for the more than 10% gain in the real economy (GDP, not the fantasy made-up market economy) in 2021.
 
CPI in a few.

The market is so fickle.

The word for the day is "fickle"

"marked by lack of steadfastness, constancy, or stability : given to erratic changeableness"


The media is just as bad.

Inflation running hot as investors await report.

Inflation report to show inflation has peaked.

Inflation starting to cool down.


The best way to measure inflation is one’s wallet. Turn the media off.
 
WOW!!

8.6% for May. Highest since 1981.
Yup,
Wonder if the market will end up on the day since the core was 6% vs expected 5.9
Interesting, media will have a ball with the news today.
Going to Florida next week to check out new homes ... ;) I think time is on my side but whatever ... higher that rates go the better for me, they never should have been so low and why we have what we have today.
 
Yup,
Wonder if the market will end up on the day since the core was 6% vs expected 5.9
Interesting, media will have a ball with the news today.
Going to Florida next week to check out new homes ... ;) I think time is on my side but whatever ... higher that rates go the better for me.


Investors are digesting all this right now. One key thought was how the Fed would raise rates after the June and July meetings and would they pause? I think the pause is out of the question now.

Someone mention 6% mortgage rates yesterday. I think we will see 8% by Christmas.
 
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