Is the Stock Market still a great place to put my money in hopes of high returns?


Is the Stock Market still a fantastic place to place my money in hopes of high returns?

The question

The Stock Market is very volatile and lots of uncertainty, what are your views on investing in the stock Market? What could be the next bubble or when will the next crash come? Gerald Celenta says early 2011 or 2012 will be the next crash, but I reckon it will crash in 2013 based on the FED lowing interest rates and making another bubble. Your opinions?

Best answers:

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Dont worry about when the market will crash. Crashes are nearly impossible to predict. The market is always a excellent place to invest for the long term, and invest according to your tolerance for risk.
In the small term – as in days – the S&P is heading to an vital pivot point – 1085/1088 is a crucial pivot point and if the S&P closes above this then we can start assume the 5th leg down has completed and we can expect another bounce up.

If not – and if we get another panic in a day or 2 (at the moment things seem cool but like last week it could be before the storm) and it dives then prepare for a very bumpy and downwards spiral.

That being said – right now the markets are a bit of a crap shoot…. and I would be very surprised to see us resist another crash for that long.

Europe is screwing thing sup royally at the moment and if the go down dramatically the US will follow them.

But just personal opinion and not financial advice of course.

Listen to Gerald Celente.
According to a number of sources (below) the govt is actively devaluing the dollar by printing too much money. The dollar’s bubble (along with the euro and british pound) will soon burst, and leave a lot of people holding a lot of worthless paper. This is a banker-plotted implosion of the world economy.
Lindsey Williams is telling people to get “out of paper” now because once the euro goes bust, the dollar will follow in a couple of weeks. This could easily happen this fall, along with a projected fake-flag terror event, perhaps a global hot-war, and a likely stock market crash.

Best investment… gold and silver. I place my money where my mouth is, too. I pulled out of the stock market and bought silver and gold when silver was at $ 21. I’m still buying the metals, too.

Although the market has seen a serious decline over the past few weeks, I would still be very cautious about entering at this point. We may be in the initial stage of a correction and with many headwinds facing us, especially here politically along with European debt concerns, worldwide economic slowdown (including China), inflation, etc,.

While no one can predict the peak of a bull market or the exact bottom of a bear cycle, the trend can be observed. Buy and hold sounds excellent, but buy and hold till when? Be careful. Nothing lasts forever and if you are at retirement and you are still holding in a bear decline, you are in real distress.

Continue to educate yourself. Nobody can care for your money as much as you do.

Best wishes for profitable trading.


Please Help! What are the cons to investing in the mortgage REITS NLY, AGNC, CYS?

The question

Wondering your thoughts with the fed holding interest rates low until the summer of 2013, what are the downsides to these stocks and considering the dividend of 14-20%, do you reckon it’s worth the risk?

Best answers:

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Hi, don’t know anything about NLY, AGNC invests in CMO’s and agency passes through securities, it’s not healthy, profitable and no signs of growth potential so I would nix that one. CYS invests in a similar market to AGNC with the thought of having a consistent risk adjusted investment income according to their website aka Fannie May and Freddy Mac covered mortgages. CYS does have an impressive dividend yield but, you need to look under the covers to see how it is achieving that yield. It is a certain outlier.
Downside: volatility and potential for loss. It isn’t likely to be smooth sailing for the mortgage industry or REITS that pay 14%. Can’t have your cake and eat it too. Expect ups and downs of 20%, especially for the more risky names.

You also need to know what you are investing in. If they own garbage, so will you. Its one thing if NLY drops 15% because ANOTHER mortgage REIT took an unexpected write off for sub-prime debt. Its another if NLY drop 15% because IT reported such a loss.

Disclosure: I have a healthy six figure approximate investment in NLY (average cost is 16.68). I have modest 5 figure funds each in CMO and HTS which I consider extremely risky, relative to average Joe. But my money should tell you what I reckon.

Given that there is virtually no federal oversight of the mortgage and banking industries, and given that there are some 3.5 million foreclosures on the books, and that will probably top out around 8 million foreclosures by the time the real estate market finally hits bottom… why would you bother with any real estate based investment until after it all hits bottom?

The Fed is trying every trick they have to keep the banker ponzi scheme going as long as they can until the whole thing implodes. They are actively looting the system, and enabling their banker buddies to loot the system until they literally can’t do it any more. Notice that the federal oversight agencies pertinent to banking and stock markets have either ruined documents or have refused to probe these bankers that brought about the whole continuing melt-down.

Notice the republican campaign rhetoric… they’re all aping Ron Paul in spite of being Bilderbergers. As inflation (now at 11.2%) goes over the 15% mark (possibly by end of this year) people will demand answers and there will be protests.


For each of the following pairs, which bond would you expect to pay a higher interest rate? Clarify.?

The question

a. A bond of the U.S. government or a bond of an Eastern European country.

b. A bond that repays the principal in 2013 or a bond that repays the principal in 2030.

c. A bond from Coca-Cola or a bond from a software company that you run in our garage.

d. A bond issued by the federal government or a bond issued by New York State.
Question 3 answers

Best answers:

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a. The US bond, because there is much more confidence in the ability of the US government to honour its debt commitments

b. the bond that matures (repays) in 2030, because you need to pay a higher interest rate in order to justify holding someones money for a longer period of time

c. the bond from the garage run company, because Coca-Cola is a 100+ year ancient company and thus must have a excellent history with debt maintenance, otherwise it would have collapsed; you garage company meanwhile, is probably very young and therefore is subject to more risk and has no credit history to justify a low interest rate.

d. the bond issued by NW state, because there is less risk associated with federal bonds, because it has more ability to manage its budget through taxation/spending cuts.

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Comments

  1. John W says:

    It’s a better place to place your money after a serious decline than before one.

  2. Never-Again says:

    A lot depends on what exactly you are thinking when you say “high returns” – and at how much time.
    If you are thinking long term, then yes, you will get ahead with a wise choice, although small term there is going to be quite a white knuckle ride. Nobody know when or if there will be another major drop.
    But the ups and downs are part of investing. Keep moving towards your long term goals.

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