Is this a good time to invest in stocks? Probably not. The dislocation between markets and the real economy is, in my opinion, unsustainable.
Extremely powerful monetary policies and stimulus measure put in place by central banks and governments to protect the ‘economy’, have given the green light for markets to go crazy! The markets are a-wash with money. But investing now will likely become a mistake.
How can you fail? Throwing a dart at a random list of stocks will likely give you a winner in this market! This just can’t be sustainable. The ability to invest on merit in a quality businesses has pretty been thrown out the window.
Stock selection
Choosing a stock to invest in based on company achievements (or future potential), on profit, historical quality, dividend, share buy back schemes and price earning ratios etc. isn’t necessary anymore, at least not for the moment.
It looks like the central bank cash merry-go-round isn’t going to stop anytime soon – so markets will keep on going up in a FOMO frenzy. It used to be called investing, I don’t know what it is called now?
All that money being taken by financial advisers, investment and fund managers is probably a waste. You and I would likely be just as well served buying an index tracker and then leave it do its thing.
What to look out for today – 4th June 2020 – market moving scheduled events
EU – ECB interest rate decision due at: 12:45 BST
EU – ECB monetary policy statement due at: 13:30 BST
U.S. jobs numbers due at: 13:30 BST