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1.Market Observations, 2.share trading, 2.Strategy, 8.Was Sticky

23 July 2016 (AFR) – Never mind the facts, buy on the promise – Investors ride risky wave on the back of cheap money

(23 July 2016, AFR, p27, by Philip Baker)

‘Fuelled by the promise again of more cheap money, it’s been the classic “buy first, ask questions later” rally that’s caught many investors on the hop.  You could be excused for thinking investors should know better by now, but the momentum-based buying over the past few weeks shows perhaps they don’t.’ <snipped…>

‘But in the US it’s been even better. An almost 20 per cent gain in the Dow Jones and S&P 500 has helped push…’ <snipped…>

‘In this current bizarre world it’s the sharemarkets that are getting more expensive, even as their earnings prospects look doubtful, and the bond market that also suggests very dark clouds are getting ready to break and wreak havoc over the economy. The topsy turvy environment means that these days it’s the bond fund managers that are investing for capital growth as bond yields fall and in some cases push deeper into negative territory, while the equity fund managers are the ones going for dividends and income. Usually it’s the other way round – you buy bonds for income and shares for growth. It can only end in tears but who knows when.’

Read more at (might need AFR login access, or try:

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Brainy's Share Market Toolbox. Read the honest truth about the sharemarket. Develop or fine tune your investing/trading strategies using share price charts (technical analysis), or learn about the investment strategies of others. Melbourne (Australia) based - supporting share market investors and traders to build wealth through smarter investing using my Share Market Toolbox arsenal of weapons to tackle the market.


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