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I'm not sure which way the NZ50C index is going to go...I only know that the Chart is telling me something is going to change, warning me to be cautious, alert and focused..
Bonds yields plummeting the world over ...At least bond market thinking no big growth ahead ...no big inflation fears ahead ...US10year from recent top of around 1.75% hit 1.25% in just 2-4 months time frame !! That should be making some stock investors sleepless ?
Normally bond prices go up as money moves from stocks to bonds ...at present both bonds up and stocks still holding ...something is going to give in soon
Maybe change Hoop was predicting after finishing of rectangle consolidation is round the corner
NZX being defensive market but very yield oriented ...so we may start to outperform wider world markets ....
NZX50 has some catching up to do ...with 4% down on YTD
Still trying to think why bond market suddenly become so bearish on future growth ....Do they fear long term Covid problems ? Or something else ??
Bonds yields plummeting the world over ...At least bond market thinking no big growth ahead ...no big inflation fears ahead ...US10year from recent top of around 1.75% hit 1.25% in just 2-4 months time frame !! That should be making some stock investors sleepless ?
Normally bond prices go up as money moves from stocks to bonds ...at present both bonds up and stocks still holding ...something is going to give in soon
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Still trying to think why bond market suddenly become so bearish on future growth ....
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Maybe it's not a bearish bond market?
Maybe it's about capital preservation. Put a dollar now into bonds, get a dollar back if held to maturity, and a small non-negative yield meantime.
"There is something wrong with a regime that requires a pyramid of corpses every few years." George Orwell.
Every bank economist are screaming inflation.. the bond market is pricing in deflation.
The bond market has got it right every time.
Bond market pricing in deflation can be seen from dropping yields ...but why ? What makes them think so ? Why they thinking suddenly from growth and inflation to this new scenario ...maybe due to many countries admitting defeat in war against CORONAVIRUS . Many already saying publicly that we need to learn to live with it !!!
Maybe that makes quick recovery and tremendous economic activity on back burner for a long while .
Now if bond market is right then stock market will catch its vibes sooner then latter
If you had a decent chunk of cash to invest...and let's say you subscribed to the Jack Bogle notion that index fund investing over time was the way to go...
Would you just buy into an index fund over time (or funds) and pay the modest management fee?
Or would you construct your own 'index fund' by weighting the stocks appropriately, but owning each business directly? For example, you might construct your own "NZ50" and then all you need to do over time is rebalance occassionally based on your own tolerance for how close you need to keep your weighted percentages for each company to the actual NZ50. More effort, but no management fee at all.
What would be the better approach?
Just buying a Smartshares ETF over time is defiitely the 'easiest'...but is it the best approach?
I think a simple way to determine what is best for you is to compare the two options in terms of cost. Determine the total management fee you would incur using an etf, then compare that to the time it would take to invest in companies yourself, and the value of that time. Balancing 50 stocks to replicate the nzx50 sounds like a huge time consumer, especially keeping book work to track your returns, dividends etc. Lets not forget the risk of being labelled a trader because your making buy and sells of 50 different stocks quarterly. The management fee for NZ50 smart shares is like 0.20% or something? You'd need a lot of dosh to make DIY worth it from a cost point of view. Personally, I'm aiming to use etfs for majority of my holdings (Especially foreign) and compliment it with a few personal picks.
Originally Posted by Hoop
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