The market crash of 2016

Only that the futures markets show no signs of expected interest rates soaring in the US. And since. Also, by my back-of-the-envelope estimate, there isn't enough trade between China and the US to affect corporate profits in the US by more than single-digit percentages. Finally, the "fair" price of a stock is its future profits, discounted at expected interest rates, and since actual stock prices tend to bounce around their fair valuation in the long run. With all this in mind, I expect this crash to blow over, at least in the US, unless the Fed does something very, very stupid.

All good points, but the stock market flows based on emotion and uncertainty about how much impact the world economies has on the US. Not many are well versed on macroeconomics or domestic economics.
Even professional economists disagree about the future trends.

what does John Bogle or Warren Buffet say?

Warren Buffett has many wise quotes. https://www.google.com/search?client=safari&rls=en&q=warren+buffett+quotes&ie=UTF-8&oe=UTF-8

The one quote I heard many decades ago that remained with me is "manage your own money." Nobody has more interest in it than you do.

That's why I make no prediction about the short run, and why I'm saying it will oscillate around a fair value. My expectation isn't that investors will come to their senses, let alone that they are sensible in the first place, but that reality tends to assert itself against emotion and uncertainty in the long run.

I agree; it's my personal opinion that the US economy is holding its own, and will grow at about 1.5%. When compared to the world economy, I think that's pretty good.

Bogle , on the , on the Vanguard line says to "shut your eyes and dont peek"

That's good advise when the market drops 300 points. Wait a couple weeks, and return to the market.

Looks like we might be in the middle of something longer than anticipated. They were saying that anticipated good news in the hiring front might brake the fall, but we had better jobs news than they thought and the market still went down 167 points.

Still think it's not that bad. After all, the market has been oscillating between 16,000 and near 18,000 for a year. And with China having difficulties, it's not surprising that we are near 16,000 now.

USA is doing too well for this to get really bad.

I agree.

Buy gold.


Or property in London or New York.

I never believed in the investment in gold. When that time comes when it's the best time to sell, supply and demand will affect its price downward. Money under the mattress is safer, but as interest rates crepes up, a good share of it should be in the bank.
Property in high demand areas are always a good investment. However, most don't have the money for London or New York, but there are other areas good for property investment. Many happen to be university cities.

anyway, gold is looked on as a "collectible" if one buys bars or coins. Gold stocks are another investment mans that doesnt have the "feel" of tqngeqble gold.

I was sort of joking with gold, but I certainly wouldn't want to put too much into stocks at this moment in time.

This is the third or fourth article I've seen in recent weeks, all saying more or less the same thing.....a drop in share prices of about 15% this year.

http://www.telegraph.co.uk/finance/economics/12093807/RBS-cries-sell-everything-as-deflationary-crisis-nears.html

"In a crowded hall, exit doors are small'

Snippet:

RBS has advised clients to brace for a “cataclysmic year” and a global deflationary crisis, warning that major stock markets could fall by a fifth and oil may plummet to $16 a barrel.
The bank’s credit team said markets are flashing stress alerts akin to the turbulent months before the Lehman crisis in 2008. “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small,” it said in a client note.
Andrew Roberts, the bank’s research chief for European economics and rates, said that global trade and loans are contracting, a nasty cocktail for corporate balance sheets and equity earnings. This is particularly ominous given that global debt ratios have reached record highs.
“China has set off a major correction and it is going to snowball. Equities and credit have become very dangerous, and we have hardly even begun to retrace the 'Goldlocks love-in' of the last two years,” he said.
Mr Roberts expects Wall Street and European stocks to fall by 10pc to 20pc, with even an deeper slide for the FTSE 100 given its high weighting of energy and commodities companies. “London is vulnerable to a negative shock. All these people who are ‘long’ oil and mining companies thinking that the dividends are safe are going to discover that they’re not at all safe,” he said.

Ok, so let's create the A2K portfolio of stocks that will beat the market in 2016. Let's pick five or six stocks, assume an equal investment in each as of 2/1 and see if we can beat the SP500 over one year.

My first suggestion is Acuity Brands (AYI). Acuity Brands is an LED manufacturer. There stock has been on a good run over the last couple of years and they have been buying up smaller manufacturers to get some economy of scale. They came to my attention when the company I work for replaced all of our florescent light fixtures (hundreds of them) with their industrial LED product. The only way that happens is if it makes sense at the bottom line. I think LED is at a cost point where it will completely replace florescent for industrial and office use. When you have to use a lift to replace a bulb in a twenty foot ceiling, the advantage of a light that never burns out is clear.

Who else has a suggested stock?

Property is my pension pot, I'm afraid. I like to read up on the stock markets and general gossip regarding various economies, but I long ago put my efforts into buying and renovating property, and either make a profit by selling on, or rent it out and get an income whilst the property appreciates in price.
I've now sold up to a certain extent, as my wife has now retired and we would prefer to go and enjoy ourselves now, as opposed to all the worry and spending my days up a ladder fixing gutters.
I now have only two small houses that I rent out, in addition to the family home and a tiny delapidated project in France.
The houses (one in Birmingham, one in North London) give about a 7% yield per annum, but the appreciation on the London one last year was about 20%......there's not many stocks that would return that in addition to giving a monthly income.

One of my mates is quite heavily into stocks and spends most of his time telling me all this doom and gloom stuff lately.

I'd rather worry about a dodgy tenant, personally. It hasn't happened so far, but I'm touching wood furiously.

If you were to say that to an American, he (or she) might arrive at a totlly different meaning

Ha!

You say "knock on wood", yes?

Real Estate is definitely a better option as long as you invest in an area that appreciates quite a bit in your lifetime.
My house tripled in value over the 15 years I've owned it and I don't think I could have made the same amount in the stock market.

On the other hand, I've dealt with tenants, they're a bloody nuisance and can destroy your place in no time.

Quote calamity:


Strictly speaking, the American stock market went up over 100% since 2009, which beats your house appreciation of tripling in 15 years on a per year basis. Of course, much of that stock market rise is merely recouping what was lost in the crash, so you can't really count on that performance for the next eight years. So your property is still the better bet.