I totally agree with your thinking, interest rates on bank accounts are rubbish. I'm generally a long term holder, but i'm gambling on the fact that the prices will drop below current levels. If i've guessed right, i'll jump back in with the intention of holding for the long term. My mother in laws gardener described the stock market as rich mans bingo. He's right about one thing, it is gambling. People lost big money on companies like Northern Rock and Bradford and Bingley. Right now BT is looking quite good, but for people who invested at £12.00, not so good. The stock market carries a financial health warning with good reason and timing is everything.
I need the warnings but whilst there is nowhere else to put your money, the yield in the western stock exchange will attract money IMHO. I see no leap to 4 or 5% which would spell disaster but just a creep up to say 2% ish. Hence I look for cash rich high yielding stock and have moved out of high risk stock. Banks, like Barclays, normally benefit from higher rates and inflation which is why I am still here. GL whatever you decide.
The longer they delay raising interest rates the worse it will be when they do. The developed world is hooked on cheap debt, at some point the central banks need to say enough is enough. The truth is the central banks are scared to change the game for fear that they'll be blamed for the resulting market drops. In my view, the central banks need to send a clear message that the days of QE and low interest rates are ending and tell the markets to sort themselves out. A small token rise in interest rates should be used to send the message.
I agree, i personally wouldn't think a 0.125% rise would make a blind difference, but i think it's more about the message it'd send. The markets are being held up by smoke and mirrors, if some of the smoke is blown away. then people may notice it has no support.
A female work colleague had to go away on a business trip, at short notice, leaving her husband to look after the house. He was really miffed, so he said to his mates lets go over to Amsterdam for a 4 days, it'll be a laugh and amazingly they said lets go for it. His wife's American Cocker Spaniel was a problem though. Ben had a brilliant idea, i'll leave three bowls of food and label them 1,2 and 3, which he did and then promptly left for Amsterdam. The dog looked at the bowls of food in front of him and his eyes lit up and he promptly started tucking in. After he finished the first bowl he was feeling quite full, so he had a sleep, but later that day he was still feeling hungry, so he tucked into the 2nd bowl. He'd eaten a lot and started running about the house, playing with his toys and basically loving his new found freedom to eat and play wherever he wanted to. After all his running around, he was really exhausted, so he slept through most of the night. Next morning he was up bright and early and tucked into the third bowl and again run around the house excitedly, played with his toys and sat at the window watching the world go by. Later in the day he started feeling hungry again and started looking for bowl number 4, but it was no where to be found, so he went hungry for a while, played with his toys and fell asleep for a while. When he woke up he was really hungry. He was getting worried by now, where's my food. He's a well behaved dog, so the neighbors were blissfully unaware of what was going on next door. Anyway Janet returned home to find a desperate dog and sh$t all over the house. Poor Janet was at a loss on where to start cleaning up the mess Ben caused, she was really p$55ed 0ff with him.
IMHO what'll drive the markets for the next couple of weeks, will be the speculation on whether, or not, the FED will hike rates in September. I believe the FED would like to deflate the markets slowly, but how do they do it??? Corporate America has misused the gifts they were given and chose to enrich themselves, through manipulating there own stock prices up. The cheap debt and money made available through low interest rates and QE went into stock buybacks and investments, not productive development. The FED know this, but are painted into a corner, at some point they've got to walk across the room and get paint on their feet, as well as painting over the footsteps as they exit lol. http://www.foxbusiness.com/2015/08/29/fischer-fed-shouldnt-wait-for-2-inflation/
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