107
votes
Accepted
When is it better to move - before or after a housing bubble bursts?
If you're moving up in house in the same area, it's better to wait until the alleged bubble bursts, since bubbles affect higher-prices homes more than lower-priced homes. You could also sell now and ...
- 142k
29
votes
When is it better to move - before or after a housing bubble bursts?
If you sell and buy around the same time, the market situation (hot, cold, before, after, or no crash) is of little relevance - it just affects the size of the numbers on both contracts, and about the ...
- 38k
22
votes
When is it better to move - before or after a housing bubble bursts?
Tricky choice, but there's a couple of things to consider. You said you plan on upgrading to a more expensive house, so you might save more on the new house post-bubble than you'd lose on your current ...
- 5,208
12
votes
Why are people still investing in stocks or indexes which are obviously overbought?
What about that graph today is different from that graph would have been 6 months ago? People 6 months ago bought thinking it would still go up, and it has. That's why people are buying today. That's ...
- 13.4k
11
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Why are people still investing in stocks or indexes which are obviously overbought?
I deny your assertion that that market is overbought, and have a graph to lend credence to my assertion.
- 50.8k
7
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When is it better to move - before or after a housing bubble bursts?
If you think you can actually pull this off, the best move is to detect bubble, sell, rent, wait for crash, buy. But you probably can't.
Let's put it this way. I detected the 2008 bubble in 2004. For ...
- 792
7
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Why are people still investing in stocks or indexes which are obviously overbought?
What's the alternative? Bonds? Interest rates are at historic lows in most developed areas. Commodities? Energy prices are relatively low and have enormous volatility (remember the oil spike a few ...
- 142k
6
votes
Why are people still investing in stocks or indexes which are obviously overbought?
1: Don't time the market
As the saying goes "time in the market beats timing the market". If you have money to invest, investing the money will yield better results than not investing the ...
- 2,778
5
votes
Accepted
What would happen if an hypothetical index funds bubble crashes
Is there any reason to think that such crash would make the companies contained in the index go bankrupt?
Not by itself. A company doesn't care about the price of their own stock unless they're ...
- 2,778
4
votes
Accepted
Can housing prices rise faster than incomes in the long run?
When over the long term housing costs in a area rise faster than wages rise, the demographic of who lives in the area changes. The size and income parameters change. A region that was full of young ...
- 145k
3
votes
Accepted
What happens with ETF if underlying index changes rapidly in a short period of time?
The paradox of the index, say S&P500 is that it's abstract and wouldn't tank too much on its own, because 50 stale companies will be replaced by companies that were in positions 500-550 before. ...
- 30.3k
3
votes
When is it better to move - before or after a housing bubble bursts?
Prices are not the only issue. After a bubble bursts, it can be very difficult to sell at any realistic price, and so you can be stuck where you are while watching lots of affordable properties that ...
- 23.7k
3
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When is it better to move - before or after a housing bubble bursts?
I'm no financial expert, but one other thing I'd think deserves a bit of consideration is which end of the process that will be tough.
When the market is high, you'd expect ease at selling and ...
- 123
2
votes
What is the proper strategy for an investor to a fundamentally irrational environment?
A long term investor should avoid irrational securities such as Bitcoin and its related stocks other than possibly a small amount of lottery ticket gambling money that you are willing to lose on a ...
- 77k
2
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Can housing prices rise faster than incomes in the long run?
In a strictly mathematical sense, no. Or rather, it depends what 'long run' means.
Say today the home average is $200K, and payment is $900/mo. The $900 today happens to be about 20% of the median ...
2
votes
When is it better to move - before or after a housing bubble bursts?
For most people, most of the time, the issue is qualifying for the mortgage, not the price differential between the old house and the new house.
The problems is that periods when prices go down are ...
2
votes
Why are people still investing in stocks or indexes which are obviously overbought?
Easy.
Stocks are expensive. So are you going to invest to bonds?
Bonds are expensive too. The interest rates of bonds are near to zero in Eurozone and low in US too.
If stocks normally offer 3% ...
- 6,753
2
votes
Accepted
Price discovery and index funds bubble
Price discovery is enough number of traders who study fundamentals and influence the price.
Index funds and large diversified funds work on pre defined algorithms... There is some decision making in ...
- 57.2k
2
votes
Why are people still investing in stocks or indexes which are obviously overbought?
In part it's the bandwagon effect. People tend to do things, whether it's investing in apparently overpriced stocks or buying Beanie Babies* in hopes of selling them at a profit, not because they ...
- 11.2k
2
votes
Accepted
What factors go into UBS’s Global Real Estate Bubble Index (GREBI)?
From the 2022 Global Real Estate Bubble Index:
The index score is a weighted average of the
following five standardized city sub-indices:
price-to-income and price-to-rent (fundamental
valuation), ...
- 121
1
vote
Accepted
Does a mutual fund buy new shares when it issues new units for individuals?
I'm going to limit the answer to Mutual Funds, since ETF shares are not bought from the fund but are exchanged between investors, so the money going to the fund itself follows a different mechanism (a ...
- 142k
1
vote
Price discovery and index funds bubble
Your final point is the most important factor in this discussion, and one that is often overlooked.
Changes in prices, and hence price discovery, are driven by trades, not by volume of ownership. ...
- 11
1
vote
Why are people still investing in stocks or indexes which are obviously overbought?
Every now and then, you'll see a news article declare that some index or exchange has reached a new record high. It would be easy to say: "Well, clearly, that means it's a bad time to buy into the ...
- 1,839
1
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Why are people still investing in stocks or indexes which are obviously overbought?
An investor, who is interested in the stock market indexes but thinks that they are too high, could take inverse positions. However, the long-term stock-market trend is upward so an inverse position ...
- 3,592
1
vote
When is it better to move - before or after a housing bubble bursts?
The trick is start renting before the bubble bursts, then move into a house afterwards. Both of my parents did that and it worked out quite well for them!
- 11
1
vote
When is it better to move - before or after a housing bubble bursts?
Do some research on the previous bubbles and see which areas recovered faster
Some of the things that prevent a market from dropping too much is the school district. More recently is the walkability ...
- 11
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