Investing in stocks and corporate bonds isn't speculation. There is a major different between investing and speculation. I'm not sure if you are seeing that based on your post. Secondly, the best regarded pension system in Denmark has a part of it privatized. I don't know your feelings on Denmark, but Bernie certainly loved to reference that area of the world as his model. Lastly, there is no reason why "Wall Street" would have to be involved with US govt purchases of ETFs, stocks, or corporate bonds. Social Security investments could be ran in their own fund. They would not have to be run by an investment bank.
This is true. A high flying stock market is not always a good predictor of future economic success of the country.
Says who? The additional funds could be spent in any number of ways - organic investment (new capital, R&D, etc), acquisitions, expenses, and yes, buybacks/dividends as well.
Yes they COULD, but it is my expectation based on 2004 results. The reason I wouldn't expect new hires, R&D, etc. is because it is a one time influx that can't be relied on in future years for planning purposes. So those things maximize shareholder value.
There is no reason to think that these overseas funds will be brought back. It still is going to be taxed. A company like Apple, Microsoft, etc can just get a loan instead and it is cheaper than paying the tax.
Please. Buybacks and dividends basically yield a company their cost of capital, assuming their stock is priced fairly. Capital investment and other organic investments typically yield far higher returns that drive shareholder value.
I agree. Quantitative easing forced investors to seek riskier investments in equities because bond returns were so low. With interest rates finally rising, the expectations of deregulation and lower corporate taxes are the likely catalyst.
It also provided additional liquidity. Even with other developed markets doing their ZIRP/QE, no other market is performing like ours. It is being propped up a bit by fiscal policy but the US has climbed it ways out of the worst global economic crisis and is on much stronger ground. I think Trump can positively impact our economy if he doesn't get too cute with tariffs and/or truly botches up relations with major trading partners. I think he will calm down the rhetoric or he will find out how powerful Congress can be when both sides of the aisle are against him. Otherwise, I'd expect a major correction to originate from China.
Oh whoops. Acting in a clumsy harmful fashion seems to send shivers into the market; investors worry that leadership might be a little unstable or incompetent or prone to causing chaos. (I mean, that is, if we attribute short-term market effects to Presidents, which is the theory of the thread.) Dow down 160 as of this writing.
I see what you are trying to do but the market hardly even moved and not much volume. We are back in the range from a few days ago and right near highs. Also the market pricing in tax cuts and other things after the Trump win isn't a short term effect. It's more a change in the rules of the game. It's a medium/longer term thing since these changes will likely be with us for 4 years. We will see how it works out for the country's economy.
Thanks, robbie. I am mainly ridiculing the idea of this thread, but we'll see. If clumsy governing does impact the market, some people's tunes could change very quickly.
http://www.cnbc.com/2017/03/01/dow-21000-may-tie-as-shortest-1000-point-jump-ever.html Dow's charge to 21,000 is on track to tie as the shortest 1,000-point jump ever
A bunch of public spending will do that, be interesting to see if Congress actual approves it, along with major tax cuts. Shame we couldn't get that ball rolling under Obama as he also proposed major infrastructure spending. From your article: Interesting that Goldman Sachs also has quite a presence in the Trump administration, you think he's draining the swamp or enriching it?
I think my 401k results don't care. I've personally earned almost 100k in growth since Trump was elected. That's what matters to me.
100K in growth in a few months.....? Right...... I also have a 401k, and I also know that I'm not making America Great since those companies are increasingly getting their profits and their growth from overseas markets. As long as you aren't a #MAGA, you aren't a hypocrite by investing.
The market has rationally assesses the economic growth under a Trump Presidency? Likely not. I'll wait for the GDP growth before making my assessment.
