Sustainability: Is the treasury bond rate destined to rise and if it does, will it bring down unique boutique s? Sustainability: I have been estimating the monthly ERP for the S&P 500 since September 2008, and as can be seen in the figure below, the premium of 5.43% at the start of March 2013 represents a significant decline from a year ago. I think you can place a stop at $32 for protection but AIG is due for a major rally back to $35-$36 soon. Great and well-known investor and others have described their preferred holding period as “forever.” I think their status tells, and there are some who can claim equal success to an investor. I think that the most likely scenario is that the interest rates will rise as the economy improved, and the outlook for stocks will depend in large part on whether earnings growth picks up enough to offset the interest rate effect. The Fed has played a role, but it has succeeded (if you can call it success) only because inflation has been benign and real economic growth has been abysmal for this period.
This is coming from a place that can very few can come from, essentially death. There are even people like online investors, someone who wants to trade from home and create an online brokerage account with a few hundred dollars to many thousands of dollars. The upside is the customization possibilities pending you enter in detailed notes and tags for each trade. It does appear the Bitcoin bottom is now in and we should trade between $4000-$6000 into the spring/summer. American Intl Group, Inc. (AIG) – Shares of American Intl Group, Inc. broke $37 on Monday and is now in break out mode. American Intl Group, Inc. (AIG) – AIG is still trading around $46 which has been support over the past several days. American Intl Group, Inc. (AIG) – Shares of American Intl Group, Inc. seem to have found short term support around $25. I have an long, not-very-fun update that I do on equity risk premiums that you can download and peruse, if you are so inclined. When this happens – because any downside will be temporary – is the time to cut the profits elsewhere in your portfolio and plunk as much down as you can on this one.
You have to make any profits that you might experience move to progress naturally. Instead, price weakness promptly rallied to test and breach all-time highs, which made my bear a cuddly koala bear (yes, they have sharp claws but they aren’t likely to maul too many people to death). When stocks hit new highs, the natural impulse is to look for signs of over valuation, but there are good reasons why US stock prices are elevated: cash flows are high, growth looks good, the macro risks seem to have faded (at least some what) and the alternatives are delivering lousy returns. This “historical” premium approach yields 4.20% as the ERP for US stocks in 2013, using data from 1928-2012. The other is to estimate an “implied” premium, by backing out an internal rate of return from current stock prices and expected cash flows. On March 26, 2013, the ten-year US Treasury bond rate was at 1.91%, well below where it stood prior to the last quarter of 2008 and well below rates that prevailed a decade earlier.