Common Questions in 2021 Is now a good time to buy stocks?
I always advise clients to not buy stocks with money they will likely need in the next few years. The market is a longerterm investment, and anything can happen in a few years' time (good and bad). When legendary investor Shelby Davis was asked if now was a good time to buy stocks, he famously said, “Whenever you have the money is the best time to buy.” Assuming you have a longer-term time horizon the best time to buy is when you have the money. I would add another caveat; do not buy all at once. Dollar cost averaging over a period of time into the market is a great way to spread money out and buy the highs and the lows rather than investing a lump sum at once.
inflation on sectors. In addition, deflationary forces have been at work for sometime now. These include globalization, tech developments, Amazon effect and demographics of an aging U.S. population with the baby boomer generation. I believe that these supply and demand imbalances have to work themselves out; and then shortly thereafter, I believe the true inflation picture regarding its stickiness will be clearer. I also believe that the biggest threat to sustained inflation is higher wage prices that employers have to pay to get help.
MONEY MATTERS
Should I be buying Bitcoin?
Honestly, I don’t fully understand crypto. I have a hard time wrapping my head around how it is truly valued. There are no cash flows attached to it, and it appears the value is in a I get this question regularly, and the truth is, limited amount of bitcoin that can be mined. I don’t know. What I do know is our economy Lee Williams Also, I have a hard time understanding a still has a lot of Fed support with continued currency that fluctuates so wildly. low interest rates and through their purchase of I’m very reluctant to buy Bitcoin and use it $120 billion in bonds every month. to pay someone when I could buy it today and in a week it Overall, the consumer is in good shape, and most be down a lot. businesses are faring well. Yes, we do have some negatives, Also, there is a lot of talk about environmental, social such as inflation, potential tax hikes and a virus that and governance, and Bitcoin doesn’t fit so well with ESG is still not under control, but at the end of the day, the factors due to all the energy it requires to mine. I could be market follows earnings. If companies are doing well and making a mistake in not owning Bitcoin but only time will growing profits, the market tends to follow suit. Sometimes tell. After all, Warren Buffett says that someone is going to the market gets ahead of this, and sometimes it’s too get rich today trading cocoa beans, it just won’t be him. I pessimistic, but over time it tracks corporate earnings. feel the same about Bitcoin. Someone may get rich trading Conditions are still favorable for solid earnings. Bitcoin today, but it won’t be me. The great investor, Peter Lynch, once said, “Far more money has been lost by investors preparing for corrections Lee Williams offers products and services using the than has been lost in corrections themselves.” following business names: Nowlin & Associates - insurance Do you think inflation is permanent? and financial services | Ameritas Investment Company, LLC This is an interesting question. At the moment, (AIC), Member FINRA/SIPC - securities and investments competing forces are affecting prices. On one side, there are | Ameritas Advisory Services (AAS) - investment advisory major supply and demand imbalances due to the pandemic. services. AIC and AAS are not affiliated with Nowlin & These include housing and semi-conductors, which affect Associates. most everyone in one way or another and driving price
How do you think the market will do for the rest of 2021?
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Lake Martin Living 41
