Down goes the Dow

Six of the eight indexes on our world watch list posted gains through July 10, 2023. Tokyo's Nikkei 225 finished in the top spot with a YTD gain of 23.36%. The U.S.'s S&P 500 finished in second with a YTD gain of 15.31% while France's CAC 40 finished in third with a YTD gain of 7.85%.

https://www.advisorperspectives.com/dshort/updates/2023/07/10/world-markets-watchlist-july-10-2023?hsid=28139139&utm_campaign=AP%20Newsletters&utm_medium=email&_hsmi=266200511&_hsenc=p2ANqtz-_IUmRJu8-qfXqB9mjBhACxUqQSgycQtxRCNfoS2ORR_2kWayG4xcCYjc79PmEEF5Jzej9AduHzWOpktV2zEZJfX5zCsfwxMh-gWfzSlrDuohz4cuI&utm_content=266200511&utm_source=hs_email

Greed and Fear index way into extreme greed...maybe time to take some short term trading profits eh

cnn.com

Fear and Greed Index - Investor Sentiment | CNN

CNN’s Fear & Greed Index is a way to gauge stock market movements and whether stocks are fairly priced. The index uses seven market indicators to help answer the question: What emotion is driving the market now?

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No, it’s not. Have you never seen an amortization table for a mortgage loan? I thought you were a financial planner.

Really, a higher interest rate front loans interest expense. No I never hear of “amort-eye-za-dom.”

Virtually all conventional loans front load interest payments. It’s the banks way of making sure they get paid.

You've marked yourself as someone who doesn't understand finances, friend.

Is that so. Please explain to me why any business would charge less than the cost of capital, on the first year or last year of the loan?

The ignorance on display in this thread is mind boggling.

Let me attempt to explain this once more for the marginally literate. Interest paid is a function of the outstanding balance (principal) of the loan. When the outstanding balance is higher (i.e., at the beginning), interest costs are higher. There is no nefarious plot on the part of the lenders to "front load" interest payments to "make sure they get paid." This is basic math, which seems to be above the heads of more than a few people in this discussion.

Sorry for being blunt, but this is getting exasperating. I thought I've been conversing all these years in this thread with people with at least a basic understanding of finances. Now I'm starting to see that many of you are play acting.

If I was financing a property purchase today I would go with an ARM (Adjustable Rate Mortgage) rather than Fixed in the hope rates settled down in coming years.

Last night I erased the sentence: “I feel like I am talking to crazy people.”

Not sure if it's been pointed out yet, but traditionally one of the benefits of a new mortgage is that you are paying almost all interest (meaning very little principal) for many years, and all that mortgage interest is usually deductible. Which lowers the cost of homeowning.

Although I know itemizing deductions is rarer under the current tax scheme so this benefit is less valuable as it was in the past.

Once the tax law was changed, at lower interest rates, itemizing was less beneficial than taking the standard deduction. I would assume that may tilt toward itemizing for those with a current ARM resetting or new mortgage.

You know, for 30 years I kicked myself because every house we've bought since our first in 1992 we've taken fixed rate mortgages, and for nearly 30 years that turned out to be the wrong choice. Mortgage rates generally declined over most of our years of borrowing, and if we'd taken floating rate mortgages, we would have saved money every time. Until last year. Thankfully, the remaining mortgage we have on an investment property was refinanced late 2021 and we took a fixed rate (1.77%). We were tempted at the time to finally free ourselves of our fear (rooted in our upbringing; my first car loan was at loan shark rates in the mid 80s) and switch to a floating rate. That would have been a very costly decision. Phew! Dodged that bullet...

That was a good choice. In the States I don’t think rates were that low, especially for investment property. Our last two home financing used ARMs and worked out well. The last a 10 Year ARM fixed at 2.875% first ten years fixed, then floating for remaining 20 years. Today I would likely go with a straight ARM that would reset after one year. Of course the details on factors used and reset period would need to be considered.

That is good for you guys. We traded for a different home at the top of our range when prices were depressed. It made sense for us, as we are home bodies. As you know maintaining a home is costly, both in time and money. Fortunately I do have the time.

Really? That’s odd since everything you have written seems to be in agreement with what I have written.

Earnings Scorecard: For Q2 2023 (with 6% of S&P 500 companies reporting actual results), 80% of S&P 500 companies have reported a positive EPS surprise and 63% of S&P 500 companies have reported a positive revenue surprise.

Rates go up, demand goes down, prices go down. Follow the money.