Coincidentally, so did I. The market is over-priced now. I put some money back into the market in December 2012. I took some of it back out today. Not all I put in in December but a little over half. Too much downside potential compared to the upside potential.
March 4, 2013 On "Squawk Box," Warren Buffett still thinks stocks are cheaper than other forms of investments and Berkshire is still buying, even as the Dow approaches an all-time high. "I think the Fed will try to give little signals here and all of that. But in the end, there are an awful lot of people who want to get out of a lot of assets if they think the Fed is going to tighten a lot." The results of higher rates, he said, "will be very noticeable" in the markets. While stocks will be hurt by higher rates, Buffett said other investments will also be affected and he still thinks equities are the best thing to buy now.
Many Retired people hold various dividend stocks that supplement their retirement. The risk is quite high --but to sell everything -take the capital gains hit --plus lose the 5% to 7% dividend that is paid would hurt. As most people know there are many well known stocks that pay in the 6% or better range--most of the telecommmunications companies like verizon and AT&T. A crash would not just hurt the top 1% --but many middle class people who have worked very hard to save and invest. People have to be very careful as they plan to retire---the buying power of the dollar is being severely challenged with the high cost of fuel, home nrg, food and clothing. Even when you retire after a long hard working career the politicians still tax you on everything from raising property taxes every year to car registrations, fishing license,tolls on roads and government tax on all phone bills to enable them to even give FREE PHONES to the takers in society. Working people really have to wake up soon to the reality that there are way too many freeloaders . Our whole financial system is at a point of IMPLODING with the politicians living the life of "ROYALTY"
The rates you refer to are the interest rates. Agree with what you say. Inflation is the 100,000 pound gorilla that is sitting in the backroom ready to come out. The easing of the rates upwards will have to be carefully managed or inflation will erode the savings of retirees and other investors. There is little chance that we will see the borderline hyper-inflation rates of the Carter/Volcker period but 7 - 8 % is very possible.
There are ways to protect yourself. For example, one could sell covered calls against a long position in VZ. Or maybe a collar where you sell a call and buy a put. Money is not only made when stocks go up, but also as they go down. For example, apple is down nearly $300 and money is being made. There are many perma-bears out there, but I don't think it's the end of the world. Besides uncle Ben has your back. For now anyway.
Papa Barack, Mama Michelle, Uncle Ben.........I disown this "family". Made highest one day gain on Apple and largest one day loss on Apple.
Funny that liberals criticize Greenspan, yet bernanke is Greenspan times 85 billion. (Pun intended) But at least he is trying to bring down unemployment. Weather by more jobs or less job seekers.
Locker room financial advisers are as reliable as locker room lawyers. Given the fact that this place is filled with kooks, it is the last place I would take advice on money matters from.
Can't disagree with that. I have never made any investment decisions based on what I read on here. There are places that I would put below here on money matters ... such Kudlow or Cramer. I pretty much stick to index funds when I can although I do have some dividend stocks and muni bonds (total 20% of investments).
