Most days on this blog, I explain why I am buying particular stocks. Today, I am going to write about stocks we should NOT buy.
The quote below comes from a Reuters news article updating the market today around 12:30.
"Stocks are close to fair value, but very cheap relative to the bond market and to cash which is very expensive," said David Kelly, managing director and chief market strategist at JPMorgan Asset Management in New York.
"Central banks have been keeping rates low and that justified higher stock prices. But we weren't seeing that because of these risks. As these risks have diminished, money is going into stocks because it has nowhere else to go. That led to the new high on the Dow Jones Industrial Average today," he said.
ON THE SURFACE-its a pretty simple quote-$ is coming into stocks because risks have diminished and there is no place else where you can put your money and get a return on your investment.
Then later in the day, I was doing my usual due diligence and was looking at different stock industries. Guess which one was at the bottom? Silver miners. Gold miners was second worst.
The lesson here, is when the big boys are putting their money into equities-they are probably taking them out of precious metals and the like. Check out these 2 graphs below on silver and gold miners and draw and your own conclusions.
The lesson is simply to think any investment through before committing your hard earned dollars. Good luck out there!
Silver Miners:
Gold Miners:
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