NYJetsFan.com Forums: Bernanke Dares You To Buy Stocks - NYJetsFan.com Forums

Jump to content

Toggle shoutbox NYJETSFAN BANTER

Jets vs Bills this weekend... Is this an easy game yet?
santana Icon : (22 October 2014 - 12:49 PM) I think i saw some breakdown that he just runs out to far and then keeps his hands way too far down
Jetsman05 Icon : (22 October 2014 - 12:50 PM) Balotelli and Sterling are going to have to be incredible
Jetsman05 Icon : (22 October 2014 - 12:50 PM) yeah he's really poor at coming out, timing, all of it
Jetsman05 Icon : (22 October 2014 - 12:50 PM) but as a shot stopper hes incredible
santana Icon : (22 October 2014 - 12:50 PM) Ramos is out i believe
santana Icon : (22 October 2014 - 12:51 PM) I like varane but hes doubtful also
Jetsman05 Icon : (22 October 2014 - 12:51 PM) yeah Pepe and Varane at the back for Madrid
santana Icon : (22 October 2014 - 12:51 PM) ITS GONNA BE GUD 05
Jetsman05 Icon : (22 October 2014 - 12:51 PM) Arbeloa(LFC former player) and Marcelo
Jetsman05 Icon : (22 October 2014 - 12:51 PM) nervous
santana Icon : (22 October 2014 - 12:52 PM) i gotta shower then i'm running down to the bar
Jetsman05 Icon : (22 October 2014 - 12:52 PM) Ronaldo rarely performed vs us at United
Jetsman05 Icon : (22 October 2014 - 12:52 PM) enjoy it
santana Icon : (22 October 2014 - 12:53 PM) you would like my sanctuary here in nola
santana Icon : (22 October 2014 - 12:53 PM) they put the megamix on for me on the large screen
santana Icon : (22 October 2014 - 12:53 PM) then i get all the individual screens with the separate games
santana Icon : (22 October 2014 - 12:54 PM) ill be around on the ipad for the TOP BANTZ 05
santana Icon : (22 October 2014 - 12:54 PM) i'm the only fool there drinking on tuesday/wednesday afternoons
Jetsman05 Icon : (22 October 2014 - 12:55 PM) I'd knuckle up next to ya buddy. Although I do prefer being alone for LFC haha
Jetsman05 Icon : (22 October 2014 - 12:55 PM) that sounds like a solid spot
santana Icon : (22 October 2014 - 01:02 PM) yeah i feel that i thought more people would make it better but during the wc it filled up with filthy casuals
santana Icon : (22 October 2014 - 01:03 PM) dont touch me casual! and i ran out of there
santana Icon : (22 October 2014 - 01:55 PM) http://i.imgur.com/cMQ53OF.jpg
HarlemHxC814 Icon : (22 October 2014 - 03:52 PM) It's so lovely to see you two getting along
HarlemHxC814 Icon : (22 October 2014 - 03:52 PM) Warms my heart
santana Icon : (22 October 2014 - 04:03 PM) yeah but we both decided that we hate you
santana Icon : (22 October 2014 - 04:03 PM) KILL YO SELF
HarlemHxC814 Icon : (22 October 2014 - 05:58 PM) 05 loves me
HarlemHxC814 Icon : (22 October 2014 - 05:58 PM) I'm delightful
Jetsman05 Icon : (22 October 2014 - 05:59 PM) fact
santana Icon : (22 October 2014 - 07:18 PM) Yeah well titties
santana Icon : (22 October 2014 - 07:18 PM) HALA Madrid
santana Icon : (22 October 2014 - 07:18 PM) Big titties at that
santana Icon : (22 October 2014 - 07:20 PM) http://gfycat.com/Co...ulMessyHorsefly
HarlemHxC814 Icon : (Yesterday, 09:43 AM) Should I start Rivers tonight or Brady on Sunday?
Jetsfan115 Icon : (Yesterday, 10:48 AM) rivers
santana Icon : (Yesterday, 12:04 PM) brady
Jetsfan115 Icon : (Yesterday, 01:22 PM) raul
santana Icon : (Yesterday, 01:40 PM) jared
azjetfan Icon : (Yesterday, 02:32 PM) Take the better match up
Jetsman05 Icon : (Yesterday, 03:31 PM) is 115 in the fantasy league
Jetsfan115 Icon : (Yesterday, 04:25 PM) nope
MikeGangGree... Icon : (Yesterday, 09:58 PM) 10-6!!!!
santana Icon : (Yesterday, 10:49 PM) no doubt
santana Icon : (Yesterday, 10:49 PM) believe!!!
Resize Shouts Area

Page 1 of 1
  • You cannot start a new topic
  • You cannot reply to this topic

Bernanke Dares You To Buy Stocks

#1 User is offline   azjetfan Icon

  • D Coordinator
  • Icon
  • Group: Members
  • Posts: 2,947
  • Joined: 30-March 05
  • Gender:Male
  • Location:Cheese Land Baby
  • Interests:Football, golf, banking and home improvements

  • NFL Team:

Posted 24 May 2013 - 02:01 PM

Any of you who have 401Ks that are stock based (especially those from former jobs) or and stocks may want to sit with your advisor or get one.

Quote

Federal Reserve Chairman Ben Bernanke reiterated this week the message he has been sending for months about interest rates, the economy and the stock market.

Oh, it was couched in rhetoric and Fed-speak, but his message to average investors came through loud and clear: “I dare you to invest in stocks.”

No, Bernanke did not use those words, but the Fed’s actions and the chatter around them make that message unmistakable.

Combine an interest-rate environment where savers get virtually nothing with a stock market at all-time highs and a general nervousness about what will happen to that market when the Fed finally stops stepping in to prop up the economy and you have to wonder if investors have the nerve to throw more money at stocks.

Then add in Bernanke’s hint that the Fed’s rate of bond purchases could slow “in the next few meetings” and he just double-dog dared you to put more money in the market, knowing that the market will react to the end of quantitative easing the way most of us respond to food poisoning.

This reaction could be short-lived, however, and by floating that trial balloon this week, Bernanke may have been testing the waters, trying to see just how much the market reacts. The more it reacts now —— the more the big institutions start to anticipate a change in policy and price it into their plans — the less likely it will react with some long-running shock when the real moment arrives.

Plenty of average investors have taken Bernanke’s dare, which has simply grown stronger and more brash since the financial crisis of 2008. That said, while statistics show money flowing into equities, most of that has been from big institutions, and there hasn’t necessarily been some huge outflow from the fixed-income side of things, so there are a lot of people who haven’t responded to his actions yet.

“The majority of individual investors aren’t biting,” said Greg McBride, senior financial analyst for BankRate.com. “In April, Bankrate.com found 76% of Americans are not more inclined to invest in the stock market now, despite record low interest rates.”

For the investors who are in, Bernanke’s dare is something they had already factored in. For the rest of the investing public, they’re balancing all of the worries that have kept them out until now, most notably balancing the idea of a market at record highs with all of the conditions that make them nervous that a correction — or something much worse — is coming.

“You don’t want to be in or out based on emotions or flows, but on fundamentals,” said Barbara Marcin, manager of the Gabelli Dividend Growth fund (GBCIX) . “The overall fundamentals of the market are mediocre right now, you can’t get too excited. So while the Federal Reserve has intended to hold the risk-free rate to practically nothing to offer investors no choice but to invest in stocks if they want a return … the average individual hasn’t poured in.”

Bloomberg Ben S. Bernanke, chairman of the U.S. Federal Reserve, speaks during a Joint Economic Committee hearing in Washington, D.C., U.S., on Wednesday, May 22, 2013.
“Traditionally, the market doesn’t form a good top until everybody is in, and that certainly hasn’t happened yet, but anyone who is getting in now has missed a tremendous run and may be getting in mostly because they feel that they have no real choice because they can’t get a real return anywhere but the market,” she added.

While it’s easy to find analysts touting the market’s solid prospects, investors are still having a tough time getting over the market’s travails of the last decade-plus. Cyclical swings don’t just batter account statements, they damage people’s confidence to stay in the market; it’s hard to stay invested — or even be invested — in a market that delivers its long-term returns in such an uneven way.

And yet for individuals, capturing the long-term return is the point.

No one has a good answer on how to do that without taking Bernanke up on the dare.

“Individual investors are starting to come into the market some, which I hate to see now that the market is at a high,” said Jeffrey Hirsch, co-author of the Stock Trader’s Almanac. “It would have been better last fall, when we had a major buy signal, or at some other time. But there’s always going to be a time that might be better, the problem is that if you just missed the last good time to get in the market, how do you know you will recognize the next ‘best time.’

“With the Fed providing a tailwind of liquidity,” he added, “I don’t think there will be a downdraft until Bernanke takes the punch bowl away. … But investors who want to take a chance now need to keep perspective on the risk versus the reward.”

Clearly, balancing risk requires diversification, not going all-or-nothing on Bernanke’s wager. It also means looking at the market not entirely in terms of percentages, but in real-dollar terms.

Hirsch noted that an investor with $10,000 looking to gain a 5% return is talking about adding $500 in annual returns compared with keeping the money on the sidelines. The discrepancy gets a bit bigger when adjusted for inflation.

“The question is whether that $500 is going to make it for you,” he said, “because if it’s not — and you’re too nervous to be in the market — you could still find yourself better off if you save more, or change your spending or doing something else that lets you invest more comfortably.”

Comfort is something the current market is not giving investors, even as it continues to play around with new highs. Investing into discomforting times — though historically profitable — is hard.

Ben Bernanke knows that.

If you’re not going to take his dare, planning around it is crucial. And if you are going to take him up on the challenge, you won’t want to be the last one to do it, because someone is going to wind up losing in this challenge, and it is most likely to be the ones who only accept Bernanke’s gamble right before he changes his provocation to something different.




Chuck Jaffe is a senior MarketWatch columnist. His work appears in many U.S. newspapers. Follow him on Twitter @MKTWJaffe.

Posted Image
0

Page 1 of 1
  • You cannot start a new topic
  • You cannot reply to this topic

1 User(s) are reading this topic
0 members, 1 guests, 0 anonymous users