Thread: Investing 102
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Old 02-14-2018, 08:35 AM
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GregWeld GregWeld is offline
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This market has become so interesting..... half the time people are betting the market is going up and buying the dips -- half the time they're selling....

I sit here and laugh at the whole silly mess -- why? Because the market is UP UP UP ---- and when it goes down 5% everyone freaks out. Really?? Pick a name - check where it was at the beginning of last year -- and where it is / was at this years LOW....


Okay --------------- but here's one thing -- AS A BUSINESS -- I would be concerned about.

INTEREST RATES.

Why?? Because people are just people. Look at your own personal situation. Do you have ANY interest rate sensitivity? Buying a car? A house? Is your old loan at 3% ?? You think that payment is "okay"? What happens if your payment is based on 5% ?? Is your home loan on a 7/1 at 3.5%.... and you're 4 years in to that.... How much will your payment go up if you refinanced today to a 30 year??

Inflation is here -- it's been here for awhile.... it's been a coiled spring waiting for the worst opportunity to pop. Rates have been artificially low for years now... they too are a coiled spring. The FED thinks it controls rates.... but they're now a SELLER... and it's a BUYERS market. What's the mean?? That means that people buying debt -- control the rate they want -- this is controlled by what they will pay for bonds - and the government has a LOT OF THEM to sell... right when they're planning to add more debt to the pile.

Here's why it's important -------- going forward ----- will people be able to buy a house at the new rates? Cars? Or will they sit on their hands and stage a buyers strike.... When/if that happens we'll start with the layoffs in the housing market.... which hits suppliers (Caterpillar and Cummins and Deere etc).... and there's a chain reaction that doesn't end well.


OR


Do people realize it's still "cheap" and they'd better get busy buying stuff (most buy on time)...


SO ---- look at your own situation for some guide. Have you loaded up with debt? Has your business loaded up with debt? Or did you pay down debt - put money in the bank - and are sitting pretty?


IT'S THE REAL REASON YOU'RE SEEING THIS MARKET GO CRAZY ---- nobody knows where we're going and we're kind of at a bit of a crossroads. Will we be in trouble as a nation with higher rates -- or will we be fine and keep going? I have no idea. I'm not saying that I do.... I'm asking you to keep your ear to the ground and watch where you live and work. What do you hear from your friends and business associates.... are they working overtime or are things coming back to normal? Is biz great or has it changed etc?
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