The Powel put
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Started by wglassfo - June 17, 2020, 11:18 a.m.

I assume everybody knows what I mean by the Powel put.

 In case you don't know , Powel is committed to QE to infinity as he has said in tertimoney that he can't or won't shrink the Fed balance sheet. He has also followed through with his commitment to buy corp bonds, even though the price has gone up as Wall St investors front ran the Fed and bought those bonds. Now they will sell those bonds to the Fed. Powel can't increase int rates as he knows higher int rates would crash the economy. He also said int rates would stay low until at least 2022

So: For those who can't follow my post the bottom line is: Powell is commited to proping up the market. He can't do anything else or ivestors will never believe him again and the bubble is burst. If the bubble burst, the economy crashes and Powell doesn't want that as his legacy

So: Now that you have the road map for the Fed and also treasury, efforts to help the recovery in every way possible.

Do you think a strong market is essential for recovery??

How many even follow Powell and what he says or is it too complicated to understand???

Two questions: Take your pick or give an opinion on either

I put this in trading as Fed actions affects stk market prices [I think], as I posted stks would trade in a range. This is why I think stks will now trade in a range. What I don't know is the upper and lower part of the trading range

Have at it all you stk traders, or buyer and sellers

Maybe we got some Robinhood lurkers on the Forum???

I would appreciate some feed back to either confirm or other wise my thoughts as we are thinking of increasing our stk portfolio [Canadian bank stks, CIBC]


Comments
By metmike - June 17, 2020, 11:59 a.m.
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"I would appreciate some feed back to either confirm or other wise my thoughts as we are thinking of increasing our stk portfolio [Canadian bank stks, CIBC]"

I would think that's a bit risky for somebody that's near retirement age in this environment, especially after so much recovery already and the huge downside risk but I don't trade stocks and stocks obviously can go off in a direction based on items different than valuation in todays world.


By wglassfo - June 17, 2020, 12:26 p.m.
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CIBC Canada has a history of never missing a qtrly dividend payment in over 100 yrs

Depending on price when purchased the usual average dividend is 5-7 %

We got 21 cents int on our last bank statement for money on deposit

By metmike - June 17, 2020, 12:46 p.m.
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I can't argue with that Wayne!

You know more about it than me.

Maybe others have an opinion.

By TimNew - June 17, 2020, 1:03 p.m.
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The stock market remains the best long term option for money.  When that stops being true,  we'll have much bigger problems.

Keep what you need for the next 5 years conservative. Cash or safe bonds/munis.

5-10 years, moderate risk.

10+ years?  As aggressive as your comfort level allows.  We've never had a crash that lasted 10 years and recovery generally takes much less.



By metmike - June 17, 2020, 1:41 p.m.
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Thanks Tim!


By TimNew - June 17, 2020, 2:01 p.m.
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I did break a rule and cut way back on my conservative position moving to a more aggressive position early April.  I'll change back before the end of the year.   But I still have income I am living on.  When that changes,  the above rules will be hard and fast.