azanon
05-18-2004, 10:04 AM
I'm with Tom, its time for stocks to really kick it.
I just got through reading an old book written by Charles Givens, who was one of those Investment/real estate guru's in the 90s. One of his littly catchy sayings in that book was "When interest rates are low, stocks will grow". Mr. Givens seemed convinced that the prime interest rate, and its current direction had a very significant effect (80% or more) on determining the earnings potential of stocks, bonds, and money market instrunments.
Givens actually died in the late 90s i believe. I bet he'd salivate at the idea of the prime rate now being 4.0%, having fell from a much higher rate, and having the stock market discounted as much as it is from its highs.
Having just read MSNs update this morning, we are hearing continued talk about the Federal Reserve about to raise interest rates. When that happens guys, bonds are going to become a poor investment option. (for every 1% rise in interest rates, bonds fall ~ 10%). With interest rates as low as they are now, money market instrunments and the like arealready poor options, serving a defensive position only. The real estate market is also at a pinnacle (IMHO). This will leave the only decent investment option as stocks and i think we'll see money being funnelled into the market very shortly which will naturally cause stock prices to rise.
Stocks are the way to go now. I'm with Tom, and if you like making money, I think that's the place to be now.
Azanon
I just got through reading an old book written by Charles Givens, who was one of those Investment/real estate guru's in the 90s. One of his littly catchy sayings in that book was "When interest rates are low, stocks will grow". Mr. Givens seemed convinced that the prime interest rate, and its current direction had a very significant effect (80% or more) on determining the earnings potential of stocks, bonds, and money market instrunments.
Givens actually died in the late 90s i believe. I bet he'd salivate at the idea of the prime rate now being 4.0%, having fell from a much higher rate, and having the stock market discounted as much as it is from its highs.
Having just read MSNs update this morning, we are hearing continued talk about the Federal Reserve about to raise interest rates. When that happens guys, bonds are going to become a poor investment option. (for every 1% rise in interest rates, bonds fall ~ 10%). With interest rates as low as they are now, money market instrunments and the like arealready poor options, serving a defensive position only. The real estate market is also at a pinnacle (IMHO). This will leave the only decent investment option as stocks and i think we'll see money being funnelled into the market very shortly which will naturally cause stock prices to rise.
Stocks are the way to go now. I'm with Tom, and if you like making money, I think that's the place to be now.
Azanon