What If INTEREST RATES Aren't Lowered Long-Term (Market News)
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- Опубликовано: 31 май 2024
- The predominant mantra through stock market news is that interest rates will be lowered because that is how it worked in the past and now the world cannot sustain higher interest rates. What if higher rates are here for longer?
0:00 Market News
3:47 Risk & Reward
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Just as an idea for you: the finnish stock market has terrible sentiment and p/e around 14. You might like companies like valmet(adj p/e 11) and neste(adj p/e 11) both growing, solid balance sheets.
Thanks for the video Sven.
My pleasure!
Top content as always Sven 👍
Thank you 🙌
Nice point! 😊
Thanks! 🙂
My wife bought a CD about 6 months ago and the bankers at the time said to expect one more rate increase and not to expect a decrease.
time will tell
Thank you, Sven ❤
Thank you too!
Great analysis Sven!
thanks!
Great content!
thanks!
That parabolic household interest payment chart scares me . The USA has negative savings rate. Charlie Munger said- this will end badly. I don’t know when.
Isn't the dividend yield meaningless for the S&P 500? Many companies do buybacks instead of paying dividends. I prefer FCF yield anyway. The reason is that companies tend to reinvest their earnings because they get a fairly good ROIC, sometimes even better than buying back their shares at an expensive price.
Nice sven
Thanks!
Thanks for the video! But I invest in businesses and not markets or economies. There are profitable enterprises to own even in the grimmest situation, thanks to human courage, perseverance, ingenuity and necessity.
Thank you. Sven any thoughts on Boeing Stock?
Short it
Thanks for the video Sven! Im in my 20s, been investing for about 3 years and have learnt a fountain of knowledge from your videos during that time so I cant thankyou enough!!
I know you're not an Index/ETF investor but the risk and reward for the emerging markets right now is very favourable and suits me well - VFEM ETF at a PE of 13 and not with only exposure to China but also Taiwan and India which I believe have a favourable growth outlook over the next decades. I currently invest monthly into this ETF to try to accumulate wealth over time as you have always stated. Time will tell if I am correct!
I am not investor but i watch you!
thanks!
People need to focus on edging and reducing as much downside potencial possible, while having like 10% cash in tbills or equivalents.
My strategy while having stocks and etfs combo, i have a 5% gold etf and 10% KMLM etf ( managed futures etf with high uncorrelation to equities and bonds ) and of course 10% cash
Huge Risk (50%) i feel isn't grim enough. When the crash comes it could easily be 75%.
Is there a reason why everyone focused on rate cuts but not on nominal growth. So long as nominal growth is low then aggregate demand will be above supply so inflation will pick up again. I am always surprise that productivity is almost always ignore.
talking about productivity hurts, thus people talk about rates
I understand that interest rates might very well go down and that there is a massive amount of cash in treasuries on the sidelines. But valuations make it so hard to imagine further upside for the indexs in the coming years. At what point do we finally justify valuations? Is this time different, and we will see permanent multiple expansion?
possible but unlikely, therefore not a risk to accept for value investors. We will look elsewhere. Buffett has been sitting in Treasuries for a decade now...
Thank you Sven
Recently you mentioned that your biggest position is in Chinese Stocks
In your next video can you discuss the risk/reward of investing in Chinese stocks as well as the Chinese government’s unspoken partnership with all Chinese companies
Thanks
that is something I see as a cost, but I compare that to the benefits and see at what price what fits me
He already did. It's a risk, but reward is high if things go well.
Thank you for clarifying your thoughts
Falling rates with high and increasing inflation...
could be!
I wouldn’t be surprised. Inflation on normal prices skyrocketed in the last month or two. The Fed needs to tame the FoMo and greed that was spurred from the March 2020 collapse.
When I am anticipating it correct (based on thorough analysis), there will be NO substantial cuts approx. up to 2030, which should mean a lower P/E, falling and/or volatile US indices and better investment opportunities in the future. Right now US is uninvestible. But at least after 2025 the rates should be more or less stable. High but stable. So we are coming to a period of time, similar to that in the 1930 and 1970, but less dramatic. Maybe there will be a 30%-40% loss of S&P until 2030. Real terms and before inflation is also important to differentiate.
Many investors are hyper fixated on interest rates but they are much less important than people believe. US markets are at all time highs after the most aggressive rate hiking in history. I wouldn’t think/worry about rates at all
good point!
lol, rates still historically not high at all, and they printed historically much money. To get inflation back to 2% long term they need to keep rates high to cause a rolling recession.
@@maxjames00077 the fundamentals of the business are ultimately what drives returns over a long period of time. Regardless of interest rates.
Could you do an updated housingmarket forecast. Should starters get a mortgage/house now or wait ?
what are mortgages at 7% now? it is not a no-brainer as it was a few years ago, so see how a house fits you
@@Value-Investing about 3,8% in NL. Renting is also super expensive here. Currently living with my parents and investing, waiting for a good opportunity 😅
It’s fairly likely that when an ‘opportunity’ comes around, if you have the stomach to take it, that your investments will also be in the toilet. Saving for a deposit is different to investing - just my two cents
I will give you a scenario of rates rising. It we get a heat wave during the planting season then corn could be a bust and cows, pigs, chickens are feed on corn so their prices could spike- Feds won't drop rates- maybe raise them.. We had a huge heat wave late last summer and this winter was the warmest on record. Keep your figures crossed. Better yet fill up the freezer now - might not be able to afford a steak shortly.
yes, few think about natural impacts, but those are getting bigger
low spx500 yield is just cuz of rebalancing, now tech sector which doesnt pay dididends is biggest part of spx500
Your comments come across as short sighted. My two cents, Just like 70s, if fed will lower the rates, inflation could rise up again or it could be the other way round. Either ways; Over a 20 year horizon, I’m lump sum investing sp500 as of today, as it’ll either grow through dividend reinvestment and / or through price action. See you in 2044. Thank you for your video.
thank you for your comment, let's see in 2044 who is short sighted!
I have looked at the dividend growth rate of various big companies considered dividend aristocrats. All I have looked at showed a decreasing cagr over time. Only Home Depot looks interesting at this point.
I'm more wary of commercial real estate loans defaulting if the interest rate is not decreased.
that could be just the start
Inflation will be above interest rates because states need to deflate their debt and the debt they take in the future 😂
likely!
Lots of doom and gloom with zero solutions. I prefer videos that offer investment solutions rather than just negative negative negative. There's ALWAYS a bull market somewhere. Where will it be?
Everywhere... Except China :)))
Yeah. The investing world is really rainbows, puppies & unicorns.
Monish, Buffett/Munger, Pierce & Klarman know nothing, too gloomy!
Put it all on AI, young man.
Nothing but sunshine💰😎👍
He did give you a solution- look for investment that have a better yield then 1.3%. And skate where the puck will be next- ie avoid AI and go into things like China or out of favor corners
He is pointing out the risks. Chasing bull markets is the wrong focus. Find good businesses that you understand, follow them over time and buy them when cheap. Much easier outside of bull markets.
knowing where not to go is the first step towards solutions
Inflation is persistent, the world is deglobalizing, war between Russia and NATO seems to loom ever closer, same with China and many countries already in a technical recession. They say history doesn't repeat itself, but it rimes and the rime is very similar to the 70s / 80s stagflation period. Bloomberg's high frequency economic indicator for the US shows a picture very different from that painted by the general media, with the US economy in much worse shape. If I had to bet, I would go with a sharp reduction of interest rates by the FED followed by a second wave of inflation. That is why I think value investing must be combined with economic cycle theory analysis in order to get better protection.
thanks for sharing!
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i just cant see a scenerio where they dont lower intrest rates at this point. highly influenced from the politicians, no one cares about wealth gap, US debt out of control and lowering it well help them.
inflation continues to get brushed off.
for now it looks like that, but you never know
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