by AgentR11 » Fri 08 Mar 2013, 17:46:15
$this->bbcode_second_pass_quote('poaecdotcom', 'I')f you clearly understand the exponential function and how energy plays a driving role in our economy, would you invest in the stock market?!!
Absolutely. And I'll make you a counter argument, if you select companies whose book valuation is primarily real assets and customarily provides a dividend payment, there is no safer place to put your wealth if you are concerned about preserving purchasing power for as long as the US government wields power. Now, this does acknowledge the "exponential function effect" in that the goal is no longer hunting for the greatest return, but rather, hunting for the ability to purchase equivalent goods ten years from now, as you can do today.
The stock market is really the last place where the long term, real inflator has more power than the FR set discount rate.
You do have to suffer the ups&down jitters though, which can be nerve racking if you're "all in" and worried about what your cash position might be next week or next month.
All that said, my hunch is that now is a bad time to buy; I think a lot of stuff is overvalued even given the effect of the real inflator. Its too many dollars chasing stocks instead of bonds and cash account balances. Need a correction to shake out the folks that buy in the frenzy and sell into a crash. I'd wait till some stuff goes on sale.