I’m very confused as to what the hell the current markets are supposed to be. The only thing that matters seems to be predicting what the federal reserve will do.
None of this makes sense to me as a young investor. By literally every marker we are in the biggest market bubble of all time, and many experts are talking about it. Yet this is somehow just the new status quo.
It’s no longer about investing in how good the actual economy is doing, is it? I mean if you were sitting there in summer of 2019 before the virus started to become known, and I came to you in the future telling you there would literally be lockdowns and economic shutdown, what would you do?
You would sell many of your investments, maybe even short the market. Warn people of what’s to come. This is the rational decision, isn’t it? Things go up, and they also go down. What the hell has happened?
But actually the federal reserve decided to prop up the markets at the expense of savers and the dollar itself… so what was the point of speculating on the economy? It didn’t even matter that we had a literal pandemic (or atleast the response of one), asset prices just went up and up. Imagine that was you, shorting on literal visions of future events, and still losing because the recession got cancelled.
Which leaves me very confused. Obviously you can’t just create wealth out of nothing, there is always a downside to QE and that is inflation (more specifically, loss of purchasing power).
What the hell happened to the markets, how did we let it get this bad? Why would the fed not use QE to turn a crisis into a less painful downturn, instead of creating so much new money that they somehow turn a shutdown into a bull market?
Am I going crazy here? We read the statements made on Friday and the Federal reserve STILL is scared to stop pumping money into the market. But nobody’s doing anything about it. How did things get this bad? No bubble resolves sideways. This is no longer investing, this is gambling, or something far worse.
I don’t know how any of you can be excited about a “bull market to come”. Sure the amount of dollars your portfolio is worth may go up… but at what cost to the dollar itself? You are literally just gambling on whether or not the federal reserve wants to prop up a bull run on top of a propped up bull run, or they decide to let the market correct