Not directly bullion - but cash flows - what does it mean?

Hi all,

I'm looking for feedback, understanding, enlightenment, etc... There's a story in the financial news that says "Cash Flows Beat Stocks For First Time Since 1990"

http://finance.yahoo.com/news/cash-flows-beat-stocks-first-114117984.html

Now, I imagine this means that they are moving to direct cash and interest, since they anticipate the stock market going sideways with no appreciable gains through the election year - and why risk a sharp downturn in stock if you don't see a clear upside.

Anyone else have any reads on this, I can only assume that seeking safe haven is good for bullion as well.

Ideas? Thoughts? Inclinations?

 

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It was a really cold winter.

Just teasing.

 

Brett, you might find this article interesting if you haven't read it.

http://www.fool.com/investing/gener...ks-you-can-trust.aspx?source=eogyholnk0000001

 

OP, from your article, here's the key:

"Money market funds invest in very short-term, liquid debt such as U.S. Treasurys and offer investors low volatility, meaning they are often thought of as a cash-equivalent."

With so much uncertainty in the marketplace and so much confusion at the Fed, big money doesn't want to park capital in long-term instruments, so they deposit in the money market funds. If we see a spike in interest rates, bondholders suffer sizeable losses, as the two instruments move in opposite directions.

In short-term instruments, maybe only running a period of weeks, the loss is minimal, as they pay off at par, whereas you can't wiggle out of your loss in a 10 or 30 year bond, because they are paid off far in the future.

To mega-institutions, a bond market crash would be MUCH more harmful than a stock market crash. Unfortunately, it's the middle class, you and me, that loses big-time in a stock market crash. In the past century, the huge fortunes were made in bond trading, not stocks.

 

Brett, forget the articles. What does you gut tell you? What has changed in the past week or month? Nothing, so keep doing what you've been doing. It'll pay off in the long run.

 

Brett, don't forget the articles. You won't know what's going on unless you actively seek out a multitude of opinions, pro and con, and weigh them against each other.

For the next 6 paragraphs I wanted to post, but didn't, email me privately.

 

OP, it really means safely parking your cash on the sidelines was safer than investing in stocks. That happens fairly regularly, but its a timing thing. There never has been a longer period of time in which cash beat stocks. Short term of course, you always would prefer to not take the declines in the stock market, but I find most people who park their money in cash usually miss the large upward movements in stocks as well.

Diversify assets, don't try to market time, and you will sleep better. Sleeping at night is a powerful reason I don't try to second guess markets. I think about it, decide on a LONG RANGE plan, and sleep like a baby. Maybe a stupid baby, but I sleep well nonetheless.

 

Thanks for the feedback on this one. I needed to hear "laymen terms" and what everyone else got out of it.

I'm getting the same thing. Uncertainty, and investors looking for a safe haven as we ride out the "stealth recession" as I call it (jobs being created, wages going up, but being offset by taxes, fees, healthcare, etc - and no long term GDP driving industrial growth).

The wife and I are at a fortunate crossroads and at an opportune time to make some short and long term moves with a nice windfall - and we want to make sure we use it to secure our retirement - regardless of market fluctuations. I'm doing my normal "measure 4492319 times, cut once" method.

What I'm reading is "safe haven" and what I'm seeing from history during the 88-1992 era is large corrections which one would typically associate with a changing of the guard (lame duck president and transition from conservative to liberal president) and a very large negative stock correction in that era.

Everyone in here has convinced me to move 100% of all our assets into Lottery Tickets.

In all seriousness, I got a lot from everyone's feedback. Re-affirms my gut instincts. We spent Friday afternoon talking to my wife's family "so-called" financial advisor that was trying to convince me that I didn't know enough to make financial decisions (in other words - pay me to do it for you). When I pulled out my 5 year portfolio track results and compared to his - he ate a large piece of humble pie.

He is used to "set it and forget it" investors, and he does pretty well by them - but I was able to beat his target portfolio by just over 2 times ROI over 5yrs. I'm a micro-manager I guess.

I'm sticking to my contrarian platform and avoiding the herd.

Thank you!

 

Silver is down $.54 at the moment but that is yet again, another buying opportunity.