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TOPIC: Stock Valuations

Stock Valuations 3 days 7 hours ago #1

  • Wanderer
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Since you like dividends have you considered adding utilities to your portfolio? Often not exciting but tend to stay more stable in the market and pay a steady income stream.
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Stock Valuations 3 days 22 hours ago #2

  • Goldbug
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I prefer long term buy-and-hold on income shares. Most of my portfolio rode out the last crash OK and kept producing dividends, and that's what I am after. As long as the income stays steady, I'm not so worried about the share price unless I'm looking to buy more. Then I want it lower.
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Stock Valuations 1 week 5 days ago #3

  • Moneyes
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FrankN wrote:
Mostly what you read online shows bullish attitudes towards 2017 so it could definitely continue

See, that's the thing. All the media has to do is tell people something is bullish and they act accordingly. People need to remember that the stock market is fueled by speculation. That's it. It's a risky proposition as soon as you step through the door, no matter how Blue Chip or conservative you are.
Last Edit: 1 week 5 days ago by Moneyes.
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Stock Valuations 1 week 5 days ago #4

  • Lexie
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The stock market has indeed been interesting to watch. We have a few shares here and there and have watched them plummet during the Obama administration. We like the rise now and hope it continues. Our rule of thumb for our small investments was "if you can't afford to lose it, don't play the market."
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Stock Valuations 4 months 4 days ago #5

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I agree this is a scary time and p/e ratios are almost as high as they have ever been. Mostly what you read online shows bullish attitudes towards 2017 so it could definitely continue, but if you are risk adverse, I would stay away.
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Stock Valuations 4 months 1 week ago #6

  • Moneyes
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This is an interesting time to play Wall Street. Ever since America knew Trump won, the stock market has been rising. This can't can't be a coincidence. The market is driven by speculation, so Trump's initial actions better be positive in nature so the market can speculate that there will be more of the same.

But I wouldn't buy in right now. I would wait until the end of the first fiscal quarter of '17. Speculations will be high for the coming year and Trump will be sworn in.
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Stock Valuations 4 months 1 week ago #7

I think that taking profits from this ride up would be practical. However, unfortunately greed can be a powerful thing, and I believe that the market tops when the greed is overpowered by reality. Reality will not be kind.

Rates are now starting to rise, and this is long overdue. IMHO, the FED waited too long to raise. There will be so many disruptions due to the artificial economic environment that was created. Trump has some good ideas, but nothing has happened yet, I find it hard to believe that he will have good cooperation, even from his fellow Republicans on his agenda.
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Stock Valuations 4 months 2 weeks ago #8

I'm not as articulate about these matters as some of our other members here, but I will say that I am avoiding buying stocks right now because of everything mentioned here. If I was heavily invested before this, I'd probably be considering selling and waiting for the inevitable low to come before buying again.
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Stock Valuations 4 months 2 weeks ago #9

The market has had the strongest bull run in history, and now, sitting at all time highs one has to wonder - are stocks worth buying now? Most writers will post info after a bubble has burst, and stocks are becoming to look attractive. This is not advice, but this is what is on my mind, with history as a guide.

My father used to tell me: "buy low, sell high, don't be greedy and never chase stocks". He was wrong for this market since it was built up by low interest rates that encourage investing in the markets and borrowing. Thank the FED for that. However, in a "normal" market - this is good advice.

The big question is, how do you think new or existing investments in the market will fare in 1, 2, 5 and 10 years from now? The FED will announce a rate hike decision Tuesday and bond yields have been rising over the past few months in anticipation. Mr. Market seems like it does not care.

P/E ratios (Price to Earnings), what you pay for stocks are already very high. My understanding is that the reason these ratios aren't extremely higher than they are now, is because of company buybacks, reducing the P/E ratio and increasing EPS (earnings per share). However, when rates rise - companies need cash and will start selling shares to raise capital. This scenario will likely cause current conditions to be extremely overvalued.

Since the Britain exit from the Eurozone, AKA "Brexit", we've had 3 wild swings. 1. Brexit 2. Trump win, 3. Italian referendum. Yet the market has resulted higher in spite of this, attempting people to believe that these are good things. The truth is, these events will likely cause more uncertainty, volatility and de-stabilization to the markets. Depending on how you look at it, these may be better for people, but not for market valuations.

This is where the market sits right now:
S&P 500: 2251.25
Dow: 19,667
Nasdaq: 5,440

Let's re-visit this topic in a year, 2 years, 5 and 10 - then we will see the end of the story. If your house price tripled in 8 years, would you sell or buy another one? We have to remind ourselves to use good sense and don't be greedy. Use good times to your advantage, not to excess.

Remember that all good things come to an end, when there's a bull market - a bust almost always follows. The environment of easy money and investing will be a cycle that will end as well. When it does, I don't think it will be a good outcome for people still invested.
Last Edit: 4 months 2 weeks ago by Finance Globe.
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