Is it time to ‘buy the dip’ ?

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So with all the trouble between the U.S. and North Korea, people are panicking a bit, hence the market has been dipping, Gold and gold-related ETF (Exchange Traded Funds) are up, and more people are going into the ‘relative safety’ of government bonds, which means their prices are going up, and their yields are going down.
Also, the inimitable VIX(the Chicago Board of Exchange Options Volatility Index), which is a fund that measures volatility, or instability in the market, is climbing. This is a kind of ‘inverse’ fund, in that it tends to go up when the market is heading down.
Plus, we keep hearing that stocks are overvalued, and that there must soon be some ‘reversion to the mean’, which basically means that they can’t stay for too long away from their usual historical averages. The other more fundamental thing about some of these tech stocks, such as Facebook and Amazon, is that their Price per Earnings ratios are enormously high.
Indeed, the VIX is up by like 50% during the past 5 days: VIX , to about $15, and many of the Gold-related ETFs are up: GLD ETF.
However, today there was a bit of a rebound, as invariably there is a bounce back as investors go out and look for bargains. They’re essentially looking to profit from other peoples’ panic about the North Korean nuke situation.
One of the things that has fueled a bit of a bounce back is the latest inflation news indicates that inflation growth is still lower than expected, which in turn makes it less likely the Federal Reserve Bank will raise interest rates (as one of the reason they raise rates is to control inflation), which can cause bond rates down the road to go lower (as they’re tied to the Fed’s discount rate), and that in turn causes investors’ money to flee bonds, and go more into stocks.
It’s all a huge complicated organism, which no one completely understands, but after dealing it with for a while, one kind of gets an intuitive feel, in part based on finncial news reports, and in part based on placing actual bets on the market, where it’s going to go.
About a year ago, when people were still holding out some hope for mall-based retail, I went short on some JC Penny stock, based mostly on a gut feeling that it was headed for a dive. It was basically an out of the money vertical debit call spread, an ‘options trade’ that wins if the stock stays below a certain point. It was just one option, and I made about $7 on it. Still, it was exciting, and by going thru the process I was forced to learn some things about how the market works.
Then there’s this interesting article in the Financial Times, by Jim Rogers, the Commodies Guru, warning of a big crash within a year, and advising everyone to ‘buy Gold‘. Is he merely trying to drive up the price so that he can profit? Or, as one comment in that link suggested, maybe he wants to go short on tech stocks, knowing that gold going up causes electronics to be more expensive (as it’s used in electronics), which would in turn hurt the tech stocks. Take every single article on there in cyber-land with a grain of salt. But even if the author has an agenda (and let’s be honest: we all have one), one can learn much from both the content and the author’s motivation for presenting it from his own particular angle.

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