Nothing to see here, move along.Real Central Bank Rates (rate minus inflation) :
Saudi Arabia: -4.3%
S. Korea: -2.1%
What I believe to be a reasonable valuation for NASDAQ for EOY 2021 would be 12,000, but I won't say this because I feel like the momentum is still so strong (even with that drifting sideways YTD) that 12,000 won't happen in the next few months, but I think it's likely to drop to 13,000 in the next 6 months. We may see 12,000 in 2022, actually...That's a 7% drop. We've been there just a few months ago when ZQQ when down 15% and I bought more.
Pandemic or not, interest rates have been decreasing steadily following a linear trend since about 1987. Rates took a sharp drop in 2020, but they're back up to their usual linearly decreasing trend. Look at how low were the rates in 2012 and 2016. The current ECY of NASDAQ is also alarming, and that takes into account the interest rates.Why does it make no sense?
Interest rates are low and will remain low for a while, inflation should be sky high and we're seeing peeks of it.
yes rates are low, and I expect they will continue to be low, and inflation will be high. I believe for that reason good companies will offer good returns.Pandemic or not, interest rates have been decreasing steadily following a linear trend since about 1987.
I'd prefer picking the stocks with decent valuations inside NASDAQ than buying its index as a whole.
I agree.yes rates are low, and I expect they will continue to be low, and inflation will be high. I believe for that reason good companies will offer good returns.
I like picking stocks with decent valuations, and I also appreciate passive index investing. Both methods make a lot of sense to me. Active/Passive is just a philosophy, I'm bullish on stocks right now, though there is a lot of stupid crap I'm not interested in investing in.
I'm okay with holding a different opinion than "everyone" so eschewing the index in favour of individual stocks is just fine with me. But with low rates and high inflation, I think equities are the place to be.
Specifically I'm interested in infrastructure, commodities and real estate right now. I think the tech world is going to experience significant political risk going forward.
I wouldn't choose to buy QQQ because I think tech valuations are in general crazy.I agree.
I believe that picking the right stocks, or at least the right sectors or industries will do good in any context when an active investor is skilled enough to adapt to the current context.
That's why INFL ETF is up +19% YTD. I also believe there will be inflation, but not all stocks will do great through inflation.
My warning is about NASDAQ specifically. But other strategies like yours will (may) do great in the near future.
And passive investors with a well diversified portfolio of indexes ETF and asset classes will do great in any context. (Great here means they'll continue to do the low volatility average return, which is fine as a strategy)
But as an active investor, I wouldn't buy QQQ at the moment, for instance. I'm wondering though if it'll continue its run up in the next few days as it seems like this time it truly managed to break that 14,000 while teaching new ATH which is bullish, but I'd still be cautious.