Current Affairs Stocks and shares and stuff

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Paris said:
With inflation on the rise it's probably a good idea to start investing in government bonds instead of crypto and Gold / Silver. Also, the stock market is about to go night night.

People are in for a ton of pain that will make the GFC of 2008 look like a nice walk in the park.

We're all well and truly farked.

Good night.
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Why would you buy bonds if you think inflation is about to take off?
 
Paris said:
www.investopedia.com

The Better Inflation Hedge: Gold or Treasuries?

Owning gold may not be the best option for hedging against inflation. What else, then? Try Treasuries or gold exchange-traded funds (ETFs).
www.investopedia.com www.investopedia.com
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The logic in that is flawed.
Yes, nominal rates increase when inflation does, but that doesn’t mean treasuries provide a hedge to rising rates. You wouldn’t want to be holding treasures *while* nominal rates rise.

It’s just saying that nominal rates will increase, and so the return of government bonds will be more attractive. But after the fact.

From a TIPS perspective, yes the fed are manipulating real yields more than nominals, but there is a big divergence between real yields and inflation expectations. The last time the gap was this large was just before the taper tantrum. If the fed do taper, then real yields have to rise too. Like nominals, you don’t want to be holding TIPS when that happens.

TIPS are a good investment when inhalation *expectations* rise. Not when inflation actually happens.
 
Just to add, if it was me and I was worried about inflation, I’d be looking at ‘quality’ as a style. Equities, focusing on companies with high market share and pricing power (and so the ability to pass through inflation to customers).
 
There are a lot of rich people trying to encourage others without their means to invest more in crypto


and just a reminder that he also supposedly brought it at much higher prices so his investment advice may not be either worthwhile or disinterested.
 
mill said:
Just to add, if it was me and I was worried about inflation, I’d be looking at ‘quality’ as a style. Equities, focusing on companies with high market share and pricing power (and so the ability to pass through inflation to customers).
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companies that have a good product and have been aggressively buying back shares over the past 6-12-18 months :bye:
 
LinekersLegs said:
There are a lot of rich people trying to encourage others without their means to invest more in crypto


and just a reminder that he also supposedly brought it at much higher prices so his investment advice may not be either worthwhile or disinterested.
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I don't get this tbh. Most people are only investing what they can afford to lose. Or at least should be.
 


This makes me understand things with a bit more clarity. We're now entering the bear market on pretty much everything.
 
mill said:
The logic in that is flawed.
Yes, nominal rates increase when inflation does, but that doesn’t mean treasuries provide a hedge to rising rates. You wouldn’t want to be holding treasures *while* nominal rates rise.

It’s just saying that nominal rates will increase, and so the return of government bonds will be more attractive. But after the fact.

From a TIPS perspective, yes the fed are manipulating real yields more than nominals, but there is a big divergence between real yields and inflation expectations. The last time the gap was this large was just before the taper tantrum. If the fed do taper, then real yields have to rise too. Like nominals, you don’t want to be holding TIPS when that happens.

TIPS are a good investment when inhalation *expectations* rise. Not when inflation actually happens.
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Another reason why I'm not investing in Gold. Rightly or wrongly, Peter Schiff is seen as its face and he's an arrogant arsehole.
 
Paris said:


This makes me understand things with a bit more clarity. We're now entering the bear market on pretty much everything.
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Not really. I mean, a proper correction is definitely overdue, but we're about to go through 2-3 years of excellent economic growth, which in turn should be very positive for earnings. What we should/will see is P/E ratios fall back to their long-term trend, which will be most painful for some speculative/growth stocks, but hardly disastrous.

If you're a long-term investor who has no plans to sell, you should be praying every night for a big correction of some kind - a perfect opportunity to get great companies/assets at a discount.
 
Mrk said:
Not really. I mean, a proper correction is definitely overdue, but we're about to go through 2-3 years of excellent economic growth, which in turn should be very positive for earnings. What we should/will see is P/E ratios fall back to their long-term trend, which will be most painful for some speculative/growth stocks, but hardly disastrous.

If you're a long-term investor who has no plans to sell, you should be praying every night for a big correction of some kind - a perfect opportunity to get great companies/assets at a discount.
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Indeed.

When 'stocks and shares and stuff' start to be discussed on football forums in the same manner as transfer rumours and armchair/youtube scouting reports, it is time to cash in on momentum and stock up on value.
 
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