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31-12-2019, 09:12 PM
(30-12-2019, 11:42 AM)specuvestor Wrote: I don't disagree with holymage and personally through my posts I 've stated that I would time a cycle through asset allocation, especially to cash. But there are others who will stay invested hold through and I don't think that's generally wrong in a sense unless you bought at the peak of a cycle would make it much more diffficult to recover. In an inflationary environment coupled with growth in real terms, markets would likely go higher high over a cycle, but one's annualised return would indeed be determined by a lot by entry price if one decides on a buy and hold strategy, and a big assumption that it's a binary decision with no averaging over the period.
And for foreign investors there's the added component of foreign exchange vs consumption currency. Higher high does not mean the FX adjusted return will be impressive either. A Nikkei 225 investor will be down -5% from Oct 1989 to present in JPY terms, -17% in SGD terms and +20% in USD terms
if you look at Japan, hyperinflation which is supposed to happen after a crash and subsequent QE stimulus, is not going to happen as the economy is just too weak and debt laden to recover. I suspect similar situation in USA now, everytime wind back stimulus and raise rates, economy goes sideways. Same in Europe and China as well.
IMHO next 10 years we might be seeing much of the same low rates, low wage growth and generally most of the developed world economy on life support. Black swan event will happen eventually, maybe Chinese crash? maybe middle east war and skyrocketing oil price? Probably good to keep cash and maybe even some physical gold.
After all even the great warren buffett berkshire is hoarding cash and waiting for shopping spree.
Virtual currencies are worth virtually nothing.
http://thebluefund.blogspot.com
http://thebluefund.blogspot.com
