patrick.net

fiscal cliff isn't the problem per se (now that we have QE4 to keep the game rigged), it's the debt limit fight coming up next year.

This is just the undercard.

Undercard?

Bill, the debt ceiling is even more overblown.

Depends on the stock...

FortWayne says

Depends on the stock...

I think the whole market is down today because of the silly fiscal cliff thing. They are all moving together.

What stock do you think is or will be independent of that?

Undercard?

as in not the "main event"

FortWayne says

Depends on the stock...

I think the whole market is down today because of the silly fiscal cliff thing. They are all moving together.

What stock do you think is or will be independent of that?

I'm looking at GE, BAC, WFC. The drop isn't very large, so it isn't the 08 buying opportunity when GE temporarily was at $7 or BAC at $4. But it might be worthwhile.

You know how it is, financial investment isn't done on a whim.

It's a great time to buy stocks. The economy after a long slump is on the verge of recovery, making it an opportunity to invest in stocks.
My humble prediction...Dow will hit 15,000 in 2013, and 20,000 by 2016.
Go all in with a few ETF's. America always comes out ahead.

Raw says

Go all in with a few ETF's.

Maybe go all in, but fuck those ETF's.

They don't tell you exactly what they are doing, and then take commissions for being obscure. Sometimes they hand you your own money back and call it a "dividend" which is then taxable. Ugh.

Better to just own the underlying stocks.

Raw says

It's a great time to buy stocks. The economy after a long slump is on the verge of recovery, making it an opportunity to invest in stocks.

My humble prediction...Dow will hit 15,000 in 2013, and 20,000 by 2016.

Go all in with a few ETF's. America always comes out ahead.

Whoa, predictions are cheap to make...

It is better to make decisions now, and then make new decisions later.

Raw says

Go all in with a few ETF's.

Maybe go all in, but fuck those ETF's.

They don't tell you exactly what they are doing, and then take commissions for being obscure. Sometimes they hand you your own money back and call it a "dividend" which is then taxable. Ugh.

Better to just own the underlying stocks.

There are different kinds of ETFs. Index ETFs have low turnovers.

Leveraged ETFs are really short-term/swing-trading vehicles.

Peter P says

Raw says

It's a great time to buy stocks. The economy after a long slump is on the verge of recovery, making it an opportunity to invest in stocks.

My humble prediction...Dow will hit 15,000 in 2013, and 20,000 by 2016.

Go all in with a few ETF's. America always comes out ahead.

Whoa, predictions are cheap to make...

It is better to make decisions now, and then make new decisions later.

I even took my kids college funds and fully invested it. Now he follows the stocks daily, and complains every time stocks drop.
I also convinced my parents to go all in with their retirement funds for high dividend ETF - "SDY"
So far so good.

High dividend ETF makes more sense in a tax-deferred account.

But "following stocks daily" is a investment psychology thing. It is a complex subject. I personally think that crowd psychology is the ONLY explanation of stock price movements. (Behavioral view.)

I'm pretty sure that consistently rising profits and especially rising dividends always drive the stock price upward.

I'm pretty sure that consistently rising profits and especially rising dividends always drives the stock price upward.

In the long-term, they are some of the inputs, but stock prices themselves will also feedback into the system.

For example, wealth effect and consumption.

But investor psychology on profit EXPECTATIONS will have direct effects on stock prices.

Prices will keep going up until people stop believing in it because of some new information.

So expectations drive asset prices. Reality only reinforces expectations.

But the reality is definitely important.

There are no stocks with a consistent P/E of 5, for example. They get bid up.

But the reality is definitely important.

There are no stocks with a consistent P/E of 5, for example. They get bid up.

True, however, by the time reality is here the prices will have long reacted to the change in expectations.

should have bought 3-4 days after Obama's re-election when NASDAQ was at 2900. now it's a bit late. i would wait for the last dip, probably in 2-3 more business days.

disclaimer: i could totally be wrong!!!

Well, it is nice to know that we are all thinking mostly the same thing lol. I guess the real issue becomes sacking-up and putting money on your bets. The market is clearly in mass-reaction mode right now, and once the government declares that it has solved the fiscal cliff issue (which it will) it will probably surge. I expect to see sizable drops over the next 2-3 business days as hysteria spreads, and then a big bump once our leadership announces that it found a way to raise taxes and cut spending (which are, funnily enough, the exact things that "going over the cliff" would do lol).

I think the only thing holding the economy up is government borrowing. No government can continue to borrow at this rate indefinitely. Its a very shaky foundation to be basing investments decisions on.

Mark D says

should have bought 3-4 days after Obama's re-election when NASDAQ was at 2900.

I agree. At today's prices it's a crapshoot, but in the days right after the election prices were much more attractive to me.

Does the fiscal cliff make it good time to buy stock right now?

Question could probably be broken down into two categories, one for short term trades and another for long term prospects. I.E. - if you are only think about buying stock now to sell in January, your answer might be different.

bmwman91 says

Well, it is nice to know that we are all thinking mostly the same thing lol. I guess the real issue becomes sacking-up and putting money on your bets. The market is clearly in mass-reaction mode right now, and once the government declares that it has solved the fiscal cliff issue (which it will) it will probably surge. I expect to see sizable drops over the next 2-3 business days as hysteria spreads, and then a big bump once our leadership announces that it found a way to raise taxes and cut spending (which are, funnily enough, the exact things that "going over the cliff" would do lol).

This close to Christmas I am expecting low volume and little movement.

Looks like yes, the fiscal cliff made it a good time to buy stock, going by the surge today as they get closer to a deal.

I sat on my hands too long (even a couple of hours ago the indexes were only up slightly). Will be interesting to see if Boehner can find enough adults in the GOP.

Looks like yes, the fiscal cliff made it a good time to buy stock, going by the surge today as they get closer to a deal.

Too early to call. 1% is nice, but it could go down dramatically wednesday if no deal is reached.

Bet you two things:

1. A deal will be reached.
2. The stock market will surge much more.

I bet the real surge will be today. I voted "no" because I thought they'd squabble about it a bit more and then backdate whatever they inevitably agreed to but apparently everyone realized what a big hole they'd dug themselves by hyping this nonsense as some sort of armageddon.

DLTR will be a big winner. Combination of unfairly getting beaten down at the same time as the fiscal cliff being overblown. It is already on the move. What better way to play the current economy than with dollar stores. It will only get better in a recession and when people can't access newly printed money as easy as today.

Wow, I have never seen my investment account jump this much in one day (1/2/13). Incredible.

Of course, it's still early in the day yet.....

I did, when they announced AIG bailout and it went from being under $1 to almost $100 in a day. Of course I didn't earn anything, I just recovered what I lost. This was a long time ago investment, still kicking myself for not buying more of it when these were considered a junk stock.

Bet you two things:

1. A deal will be reached.

2. The stock market will surge much more.

Incredible accuracy, Patrick.

I hope you acted on your prescience and made some green.

pdh says

I thought they'd squabble about it a bit more and then backdate whatever they inevitably agreed

I was also expecting something to be agreed upon late this week. It's unlike them to actually meet a deadline.

zzyzzx says

pdh says

I thought they'd squabble about it a bit more and then backdate whatever they inevitably agreed

I was also expecting something to be agreed upon late this week. It's unlike them to actually meet a deadline.

Well they did push out all spending cuts by two months and the debt ceiling too! :)

Now that a deal has been reached, it may be a good time to sell. A correction is still coming. IMHO

Markets up 2%
Oil up 2%

Less transaction fees and taxes,,,from any realized profits

Weeeeeeeeee!

I'm giving Troy some credit too. I thought they'd get a real deal done -- it should have been a tipoff when the negotiations went to Biden and the Senate. Showdown in March -- and it will get ugly. GOP actually had the juice to get a Grand Bargain type deal done in December, but of course they botched it again. I am amazed at how many times they can shoot off their foot (oops -- there goes the other one).

Seems like the stock market bump caused by the deal is over.

Yes, that was probably it.

Now can we predict the next market bump up?