cobran20

Martin Armstrong's Economic Writings

3959 posts in this topic

19 hours ago, cobran20 said:

Yesterday my mortgage finally hit zero so that makes sense in my world view :)

Thinking now of buying some index funds domiciled in Ireland (don't want to pay US estate taxes for no reason) through the company in Singapore (no tax on investments if that is not what the company is doing as a primary purpose).

I have no intention in trying to be a smart investor or anything but I assume interest rate increases would usually be good for bonds bought now and bad for S&P500 bought now.

No idea how a stronger dollar would impact things, both down?

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On 26/05/2018 at 6:07 PM, tor said:

Yesterday my mortgage finally hit zero so that makes sense in my world view :)

Thinking now of buying some index funds domiciled in Ireland (don't want to pay US estate taxes for no reason) through the company in Singapore (no tax on investments if that is not what the company is doing as a primary purpose).

I have no intention in trying to be a smart investor or anything but I assume interest rate increases would usually be good for bonds bought now and bad for S&P500 bought now.

No idea how a stronger dollar would impact things, both down?

Congrats!

10% interest rates was in reference to Europe. My understanding is that an increase in interest rates is bad for bonds not good. Armstrong also believes US stocks will perform well.

 

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Bonds annoy me :) just when I think I remember how they work I realise I have forgotten and don't want to face reading up on them again... oh well they are considered an investment for old people anyway so I guess I'll just stick with the S&P index.

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You should actually consider or do research on the Nikkei. It's been in a bear market for so long it will have to come good (or better) at some stage.

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Bonds are in bad trouble when rates rise, cause the rates on YOUR bonds doesnt rise, only on NEW issues, so your bond has a low interest per year which then sucks compared to the new higher ones.

In my opinion stocks are quite high so i would advise to only TRADE them not to buy and hold them.

Im struggling myself to find investment opportunities actually. Commodities are historically cheap now....

Edited by Swaize

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i thought about it again:

say a company has a certain costs and a certain profit margin and say they earn 12% per year then if you have 100$ of stocks you get 12$ per year 

when inflation rises and rises, their costs rise and they get a bit squeezed and also bonds might then give 8% so their 12% doesnt look as good anymore

but since rates keep rising you also dont want bonds! as the bonds of next year bear more interest than yours.

real estate should be really bad at the first 5 years since people go bankrubt with rising rates!!! so houses come to market.

 

so there is really only one thing to invest in: tangibles, commodities, prices of things that rise because costs to make them rise!  if you own a farm and your costs rise, that sucks. but if you just own wheat itself then its price rises with rising costs to produce it.

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1 hour ago, Swaize said:

i thought about it again:

say a company has a certain costs and a certain profit margin and say they earn 12% per year then if you have 100$ of stocks you get 12$ per year 

when inflation rises and rises, their costs rise and they get a bit squeezed and also bonds might then give 8% so their 12% doesnt look as good anymore

but since rates keep rising you also dont want bonds! as the bonds of next year bear more interest than yours.

real estate should be really bad at the first 5 years since people go bankrubt with rising rates!!! so houses come to market.

 

so there is really only one thing to invest in: tangibles, commodities, prices of things that rise because costs to make them rise!  if you own a farm and your costs rise, that sucks. but if you just own wheat itself then its price rises with rising costs to produce it.

Every asset class has its moment in the sun. You just need to determine what will shine next, usually something that has been extremely oversold.

Since nothing rises forever, any asset class that has been at high prices for a while, will eventually deflate until it is oversold again.

Just need something like Socrates to fine tune the timing.

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Yes cheap is a good start, hated, neglected.

But also there needs to be a push for it to rise soon, otherwise it can be 3 years til it moves. Or one buys on obvious nice buy signals.

With commdities im unhappy because they are traded in dollars and when the dollar rises, they might get whacked down. After the dollar peaks, circumstances are much better, then you got no more headwind :)

That would be in 2-4 years according to marty

 

In my experience i made tons of money when i followed current bullmarkets and got out again before or after the top.

Its much quicker since its already rising. So say, gold goes above 1362, then the low was 3 years ago, so its a current bullmarket since many years.

Edited by Swaize

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