@Skylar
It’s basically all the USD circulating out there. You can think of it as a measure of money supply.
@Skylar
Here’s a link to learn more: M2 Definition and Meaning in the Money Supply
You can still find stocks with lower P/E ratios if you avoid all the hyped-up tech and cryptocurrency stuff. Look at companies like General Mills, Exxon, or Dollar General.
The idea of ‘value’ really shines when the markets slow down. When things are booming, value stocks get overlooked, but when the uptrend stalls, that’s when they come into play.
Remi said:
The idea of ‘value’ really shines when the markets slow down. When things are booming, value stocks get overlooked, but when the uptrend stalls, that’s when they come into play.
Right on. When things slow down, value holds its ground better. It’s all about timing those rebalances for when the market changes.
What’s the effect of having millions of people putting money into it monthly, regardless of price? Is it like a government pension plan at this point?
Baylen said:
What’s the effect of having millions of people putting money into it monthly, regardless of price? Is it like a government pension plan at this point?
But think of all the folks who are pulling out money during retirement. We’re bound to hit a balance eventually, right?
@Dale
True, but with index investing getting popular worldwide, won’t that keep pushing the market up?
Baylen said:
@Dale
True, but with index investing getting popular worldwide, won’t that keep pushing the market up?
Unless the population stops growing, we’ll probably see more people investing than retiring.
Baylen said:
What’s the effect of having millions of people putting money into it monthly, regardless of price? Is it like a government pension plan at this point?
It’ll probably stop if bond returns start looking better or if people choose to spend instead of invest.
This is exactly what Buffett’s been saying. That’s why he’s sitting on a huge pile of cash, waiting for good deals.
Haru said:
This is exactly what Buffett’s been saying. That’s why he’s sitting on a huge pile of cash, waiting for good deals.
But the market keeps going up. There are still good opportunities out there.
@Eli
It’s a bit of a cycle, though… value investors see no deals, while others see the market rising and keep buying.
Wil said:
@Eli
It’s a bit of a cycle, though… value investors see no deals, while others see the market rising and keep buying.
I think there are deals because companies are constantly innovating. Some are practically printing money.
@Eli
That’s valuation inflation for you.
Everything looked reasonably priced just five months ago compared to now.
People accuse me of timing the market, but I’m just trying to manage risk at these high valuations. I’m not selling everything, just adjusting my asset allocation.
There are still affordable companies out there. Check out Google. Strong growth, decent P/E, and they’re set up well for the future.
People need to look at more than just P/E ratios.
P/E doesn’t tell the whole story, and ‘fair value’ changes over time. What’s considered fair now might be way different from 20 years ago.