Stories
Slash Boxes
Comments

SoylentNews is people

New York Stock Indexes Reach New Highs

posted by n1 on Tuesday August 16 2016, @01:53AM   Printer-friendly
from the money-for-nothing dept.

butthurt writes:

Reuters and Yahoo Finance report that the Dow 30 NASDAQ and S&P 500 stock indexes all reached record high levels on Monday. According to Yahoo this last occurred in 1999.

Reuters cited as possible factors speculation that the central bank will not soon raise interest rates, rising oil prices due to speculation that oil producers may cut production, and a Bureau of Labor Statistics report issued earlier in the month.

Original Submission

 
This discussion has been archived. No new comments can be posted.
New York Stock Indexes Reach New Highs | Log In/Create an Account | Top | 39 comments | Search Discussion
Display Options Threshold/Breakthrough Mark All as Read Mark All as Unread
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.

  • (Score: 2) by Bobs on Tuesday August 16 2016, @04:53PM

    by Bobs (1462) on Tuesday August 16 2016, @04:53PM (#388724)

    mmcmonster,

      thanks - lots of good advice.

      One thing I think it is important to be wary of about bonds funds: price collapse.

      If you own a bond fund, and interest rates go up, then the value of the fund can go way, way down, fast and you can lose a lot of money.

      But, if you own individual bonds, even if the interest go up, you can get all your money back, and collect the interest rates just by keeping the bond, (not selling it) until it is due.
    (FYI: All bonds / IOU's have a due date, usually years out.)

      So you buy a 10-year bond in General Mills for $1,000 today, you collect interest for 10-years then they pay you your $1k. (To simplify.)
    But if you buy a bond fund for $1k and interest rates go up, the fund could suddenly be worth $500, even when you go to sell it in after 10 years.

    With a bond, you only lose your initial investment if the company goes bankrupt. Outside interest rates don't matter when the bond comes due.
    But with a Bond Fund, the value is directly tied to and varies with the relative interest rates. You can lose a bunch of money.

    At some point interest rates will go up, and bonds funds will lose value. Guaranteed.

    We have been living in a time of (historically) unusually low interest rates for several years. Nobody know when we will revert back up to "typical" levels. But an unusual event/black swan could suddenly spike interest rates. and kill the value of bond funds the same day. (ex. War, big terrorist attack, Don Trump winning election).

    Owning individual bonds in (relatively) safe companies takes bit more research, but it is much, much, much safer than owning bond funds.

      So, don't time the market and don't buy bond funds.

    Good luck!

    Starting Score:    1  point
    Karma-Bonus Modifier   +1  
    Total Score:   2