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Originally Posted by RoadtoPro
Very informative DC. 55 year B/E stretch?!
That is misleading since the dividends received would have been significant plus that was the most severe economic event in US history, and it was also the most overpriced the stock market had ever been until the Dot.com crash ~2000. However, if you simply look at the S&P 500 in 1929 it reached close to 500, which is where it was in the early 1980s.
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Originally Posted by RoadtoPro
DCA seems like a great strategy. I like it. It makes sense that the market was due for a correction as stocks seemed to hitting all time highs every week for 5 months last year to early this year.
The good news is that even if you bought right at every top you'd be up quite a bit (like if you bought in 1987, 2000, 2007). However, you'll get an especially nice and quick return when you invest money at the bottom.
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Originally Posted by RoadtoPro
What influence does the Fed cutting interest rates have? Is that another way of saying they’re making it cheaper to borrow funds- which should boost the economy?
Yes, it allows businesses easier access to capital which allows them to invest more money in their business which helps them make more money.
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Originally Posted by RoadtoPro
But wouldn’t that inherently signal that the Feds think the economy is in trouble and that market should’ve been going down in 2019 and in prior years?
You would think (at least to a point). However, in recent years the fed has been taking these measures even when the economy is seemingly fine.
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Originally Posted by RoadtoPro
And doesn’t this have negative effects on the purchasing power of our dollars? As this would result in high inflation?
Well it's certainly inflated asset values but in terms of true inflation (as measured by economists) we haven't had much of it in quite some time. If inflation were to increase, then the Fed would raise interest rates to curtail it. If that were to happen, then many companies' values would suffer, particularly tech names who depend on growth and future profits in order for their lofty valuations to make sense.