Wednesday, November 14, 2012
Or maybe amusing days? I don't exactly understand what's happening. Fiscal cliff? This is a news more than a year old. Obama won? Come on, what idiots thought he wouldn't? When Intrade rated his win at 72% day before the election? What else? Europe? Nothing is happening there, really. Can't say it's good, but not that bad either.
It's not panic yet. I did some buying lately, mostly fixed income. If panic hits, I'm buying more. Fiscal cliff will be avoided, to some extent. Yes, some taxes will go up. And millionaires are not only ones going to get hit. But I don't expect 1+ trillion in tax hikes. And spending cuts aren't going to be that big either. Of course, I'd prefer that there is no tax hikes or spending cuts, and explosion of deficit, financed mostly by Fed. That would kick off some inflation, which we desperately need. But that's just me, there is no political will to it.
Long term, we are going Japanese. Low inflation, no inflation or even small deflation, low growth and flat stock market (and other markets probably) for decades. Which means that the only way to make some money would be on stock market, buying either high dividend or fast growing stocks. Another way of making money is to buy bonds. Forget about CDs, money market, government bonds (except munis). They are not going to pay any meaningful yield.
Posted by Alex Filonov at 7:20 PM