Secular Bear Market in stocks - where does the money go?

[Aaron Sice]

Aaron S would you argue that there are more people looking for/demanding property than shares?

people? probably. hard to know, because people might buy one house, or two. people will also buy 5000 shares in a mid cap, because its a relatively low entry cost investment.

hedge funds will buy 5000000 shares in a large cap over a two week period, and yet a super fund might only be exposed to a small apartment block.

so the demand for shares is going to be much greater, because it suits institutional investments better because of its liquidity.

but as for people demanding one over the other, i can only say probably due to the most obvious reasons of shelter and basic investment.

 

[Intrinsic_Value]

yo might want to check how they got their lawyers to structure their Chapter 13 bankruptcy form.

corzine got away scott free, jp morgan got their silver and clients lost their money and deliverables.

oh, and corzine is still financial consultant to the obama administration.

oh, and corzine is ex goldman sachs.

again what has all this to do with mainstream equity funds management. If i am invested in perpetual/commonwealth bank/westpac/maple abbott etc etc straight vanilla equity funds management, this is all not relevant.

 

[Intrinsic_Value]

Because of conditions external to Australia. Much larger influence than the transfer of funds within Australia.

The GFC, USA, Europe, China........our stockmarket wont trend upwards till the Chinese one does. And/or the crap in Europe/ USA is resolved.

Yes Evand, you have hit many 'risk' nails on the head. there are lots of 'risk' out there in investment land.

I dont know the outcome of the risks, but at least i recognise that i dont know, and thus i invest accordingly. In this environment i prefer the micro to the macro.

 

[Intrinsic_Value]

For those who are debating stock market vs residential property, remember residential property is characterised by 'other factors' essentially the demand from 70% of purchases which are owner occupied.

Such decisions are not made on pure economic (or investment if you like it) rationalism, but rather personal decision making (ie the desired PPOR)

 

[Intrinsic_Value]

Believe it or not, buying the stock market when its going gangbusters will give you lower average returns then buying when its falling or flat.

Trick is to buy it before it goes gangbusters, and thats the hardest part to predict.

of course this makes perfect rational sense.
Why?
(a) to compensate holders for additional 'perceived risk'. Note that perceived and actual risk may vary significantly.
(b) even though prior rate of performance should not indicate future return, many people become 'encoraged' once prior rates of performance show some form of excessive profits (this is why excessive bull markets occur in the first place).

Let me give another hypothetical with regards to the underlying focus of this forum: residential property.

Imagine for hypothetical purposes residential property over the last 10-15 years was a real bummer of a return. Do you think this wouldnt have an underlying effect on the popularity of the asset class.

Yet what will be the future return based on this scenario????????