In case you have not heard, there are about 5 companies in America driving the markets. They now make up 28% of the SP500 index (TSP C fund)…
So you might ask why the economy is off-subject for an investing service. That would be because the economy has not mattered to the markets since the Great Recession. And when it does, bad news usually propels the market higher on hopes of more financial stimulus – the real driver.
Citadel was front running half of the Robinhood order flow and just got a slap on the wrist from regulators who will probably work for Citadel or another like firm soon.
Congratulations. Really, but remember it is what cash flow you end up with in retirement that matters. So did you learn any lessons?
If a picture is worth a thousand words, what’s a good are chart worth. Find out.
Understand today the inside money is selling high today into the Fed’s fire hose and new companies will make their money in the financial markets and probably never in the real economy. The retail money is pouring into the markets laughing at the old timers who have lost their touch. Now I agree there is a chance the central banks continue the madness, but something is going to break sooner or later – something big.
Daydream, fantasize or hallucinate – if you choose. But this is a fiasco – and rather tangible, at that. It started years – even decades – ago. The craziness turned extreme last year, with the Fed aggressively stimulating in the face of highly speculative markets. It was never going to end well.
We are in a hostile investing environment with poor long-term support for the current prices in the markets. The stock market is simply riding the Fed’s largest intervention in history. And every wave ends the same.
It appears there are a lot of investors who do not know that stock prices get wiped out in bankruptcy.
Most retail investors have not experienced stocks and corporate bonds being wiped out in a restructuring. It will come as a shock to many. The reason a few mega companies are pulling the SP500 higher is a defensive move away from this restructuring risk.