ECB cuts interest rates to -0.1%

It's really the main tool the government has to control the economy, but when you couple it with all the regulations towards lending it really doesn't "trickle down" to the spenders.  It's getting better, but it's still really difficult to get loans on many things, so the economy sits in the rut it's been for several years.

The banks love it because it gives them virtually unlimited "free" loans, but that's about it.

As I've said before, something is going to give in our economy.  I'm not sure what the catalyst will be, but it likely won't be pretty.

Based on what?  Not meant to be sarcastic, just interested in hearing differing opinions.  I said before the year started I'd be happy with a 8-10% return this year in the stock market, compared to the double digit numbers from the last few years.  I'm at 7 % now so it could end up being better than I had thought.  I'm still dumbfounded by people who have the means, but have stayed out of the market because they are scared of "something".   What a run they have missed/are missing.  At this point, with an election year looming, I can't see the trend reversing.

Based on the premise of what's holding the stock market up.  QE

Obviously I have no clue what the market is going to do and it could go up forever, but when you look at the economy as a whole compared to the stock market something is out of whack.  I like to call it the steroid market because of all the government doping going on.  When the doping stops, the stock market will fall back in line with the economy as a whole.  When will they stop the doping?  Who knows.

I think it was either late 2012 or early 2013 was when I realized the magnitude of the QE's effect on the market based on how it was reacting.  Every time there would be good economic news the market would plummet because wall street was worried that QE would stop, whoever when there was terrible news about the economy the market would explode.  It was completely the opposite of what it should have done because the market is driven almost entirely by the amount of money the feds are putting into the system.

Personally, I'm out right now but it's more about me being too busy at work to keep an eye on things.  I trade based on trends and the market is still trending up.  I'd be long on the market right now and continue to stay long until the trend reversed downward.  Then I'd ride it down.  

Actually, this year, the market is behaving much more normal.  It's up on good news and down a bit on bad news.....and the truth is, there is more good news than bad news right now, which, if history is a lesson, means that there are good gains ahead moving to an election year.  hell, the S&P (which some predicted would fall all year) is on a steady march to 2000, the Dow and Nasdaq are near 17000 and 4300 respectively.  The bull is nowhere near dead.

Obviously the market will go up and it will go down and hopefully it continues on an upward trend overall like it did through the late 20th century.  It is breaking out some now, but for the past 15 years it has really been flat overall stuck in the 2000 & 2008 bubble swings.
S&P last 15 years
I read something the other day that I thought was interesting.  The S&P has gone up almost 24% since the 2007 peak, but the per capita income hasn't even increased 2% during that same period of time.

I'm personally very skeptical of the market as a whole because I started my investing as an adult in the late 90's during the peaks.  I lost my behind during the first bubble pop.  I got all excited and sounded a lot like you during the second run up and was loving the ride and then it all blew up again in 2008.  The unfortunate thing was that I had a personal financial issue in 2009 that forced me to liquidate towards the bottom so I didn't get to ride that one back up.  However, as we've discussed before if I were to have bought all my stock at once back in 1999 my overall return for the last 15 years would have been at best 20% total which doesn't even cover inflation.

At 40 I've got at least another 20-25 years of growth investing left in me and if they're anything like the last 15 years buy and hold is going to net me jack squat.  All the "make money in the market" strategies have to either go back to the mid 90's or assume start periods in the down side of the bubbles.  Buy/hold and or dollar cost averaging through my investing years has been crap.  

I started investing in 1987.  I didn't bat an eye when either bubble burst and, in fact, poured every dime I could spare into the market when those "crashes" occurred (on the advice of my grandfather)   I have stayed the course and it continues to pay off.  I'm close (4-6 years) to retiring so I'm starting tothink of other investments besides the stock market, but not getting rattled by the ups and downs of the market and looking down the road long term has been the deal. (as it always has been).  I don't get trying to "play" the market......that seems like a good way to get played, and get hammered.

Still, if you didn't have as much money as you could afford in the stock market when the Fed was TELLING you they would keep it propped up the last 3-5 years....well, I'm not sure what to say about not betting as close to a sure thing as there ever has been.

Who says I haven't been.  I've made a killing over the last three years "playing" the market.  I honestly don't care which way it's going because I make really good returns in any trending market (up or down).  The reason I like swing trading is that it gives me the control vs. "hoping" the market keeps going up forever.

So, in a way I do buy and hold, but just on a shorter timescale.  I buy on Friday and hold till the next Friday.  I also buy options so I get a 100:1 leverage on every dollar I spend which lets me risk substantially less $ on each investment.  In other words I can risk $100 but get the return of 10,000 invested for the week.

Then how in the hell did you get beat up in 2000 and 2008?  That's a pretty long "friday to friday".

And I wasn't talking to you in particular regarding not being in the market.....but there are a ton of folks who won't get in because they listen to poeple saying it will crash based on nothing more than a feeling,,,,,,,while the economy makes a slow turn and comes back....bringing the market with it.  Dude, if you don't think our economy is turhning around.....head to N. Dakota and take a look around....and that6's only one example.

lol, I didn't start swing trading full time until after the 2008 bloodbath.  

Early years I worked at MCI/Worldcom and invested heavily in the company stock plan which matched 100% and let us buy at a discount.  Oops
After recovering from that I started investing in what I'd call standard investments 401k and mutual funds outside of that.  2008 hit and I had my little midlife crisis that involved going to jail and losing my job that forced me to liquidate at the bottom to get my company going.  Oops
My real retirement investment is my business, but secondarily I only do swing trading on ETF options (primarily QQQ).  After MCI/Worldcom I'll never buy a single company stock EVER again.  With 15 years of ups and downs I'll never "buy and hold" in the traditional sense.  

Most of what I hold now are Mutual Funds....but 100% stock invested.  I've held a couple of funds for over 20 years.....they have been managed quite well.

I agree in abolishing the Fed because the markets need to go up and down and companies and consumers need to react accordingly.  I have called it the "everybody gets a trophy" mentality of government in that we can never let the markets/economy go down and have to do everything including borrowing into oblivion to keep them up?  Why do we do that?  So that no company will fail?  If I own a billion dollar company and mismanage it to the point that it's going to fail, shouldn't it fail?  Or should I be rewarded by getting billions/trillions of dollars from the federal government to power through my stupidity.
If nobody fails, then nobody learns.  If nobody learns then the economy as a whole gets more and more unstable and we all lose in the end.

Same thing with stocks, if the market "always" goes up and everybody dumps all their investments into equities because "they always go up" then what happens when they don't?  It's far worse than if equities didn't always go up and people diversified their portfolio's into several solid investments.

Here's a fairly balanced article about the unintended consequences of QE and how/why it's holding the markets up:

http://www.moneynews.com/Ed-Moy/Fed-QE-inflation-Yellen/2014/02/14/id/552765/

Personally, if I had a lot in equities or mutual funds I'd keep a very close eye on the Fed and their QE.  As long as they keep it up, then it's all systems go, but when they shut it down it's time to shift out of equities.

From the article:
Seeking higher returns and short-term gains, financial institutions poured money into the stock market and invested in businesses in emerging markets that had robust growth. With QE funds not doing what they were supposed to do, the Fed had little choice but to end the program gently. That is why the stock market and the currencies of emerging markets tanked when the Fed started tapering its asset purchases. Without propping up by the Fed, investors are starting to focus on the fundamentals, which are mixed and do not support many high stock prices.

If you need more proof of the correlation, then look at this graph of the Dow compared to the money pumped in by the Fed:

The intent was for the QE money to go into the economy, but it's really just going into the stock market because banks aren't willing to take a risk by lending, it's much easier to just throw the money into the market for easy returns.  When QE stops and they try to get the money back the vast majority of the money will come out of the stock market and then the underlying equity fundamentals will have to support the market.  The underlying fundamentals aren't really that much better than they were back in 2008, which is why I say another "crash" is coming at some point.  The market is in a bubble that's unsupported by fundamentals.

gr33n - seriously.....how much do you figure you did not make by staying out of the market these last few years......even though you agree this will go on for a bit yet.  My money has almost tripled in the last 6 years.....it's stupid. I make more per year, just letting what I have ride, than I do in salary....between the two it's a six figure deal that starts with a 2, per year, and I'm a damn cop....I agree it's outrageous, but to sit by and watch seems insane to me. At this point, it can crash for 2 or 3 days while I bail out and I'm WAAAY ahead of where I was 6 years ago.  A 20% correction?  30%?  Who cares?  I'm not clever, I'm just listening to what the Fed Chairman does......do you need more clues? 

I'm close to doing what Rayd says......I'll get out....but there is no need to panic sell, or even worry about it.  I'm way ahead of where I ever dreamed I'd be.  I'm 54....my goal was to retire at 60 and not have to work.  If this can hold on through the election year (a pretty good bet with the way the markets can be manipulated, and the Dems desperate to hold on to the White house and point to a robustly recovered economy) I'm done when the next President gets sworn in.  These are just people running this deal......listen to them.  THEY aren't clever.

I'm still in.

Just one word of caution on your exit timing.  Never underestimate how difficult it is to sell at a loss.  I have a good friend who I worked with at MCI 14 years ago who said virtually the exact same thing you did.  It dropped 20%, 30%, 40% and he COULDN"T sell it because it was worth so much more and was going to go back up.  He went from several million dollars to ZERO and never sold out.  The human mind is a crazy thing when it comes to stuff like that.

A good friend of mine used to tell me that I haven't made a penny until I've realized the gain.  In other words until I've sold the interest.  So, you have an awesome portfolio out there today, but you haven't sold it yet so you've technically gained nothing.  (kind of a weird way to think of it, i know)  

I've had many option trades where I was up 500% plus in a matter of days/weeks/months and ended up ultimately selling for a major loss or even losing 100%.  Obviously mutual funds don't have that kind of risk, but just giving an example.  

I'm such an optimist.  I know.  

I have just grown very very cautious about my external investments over the years.  If anything that's why I really like owning my own business because I get to control everything and know if things are going good or bad.

I don't have those kinds of problems.....I control my account but it's tied to a larger retirement fund.  If I want to switch it all to cash, or bonds, I can do it with a phone call, or a right click.

I think you left us hanging on the Anecdote.  Did she buy in or not?  

One of my favorite personal stories of wealth ideas foregone was related to the domain name craze of the late 90's.  I can't remember the exact year, but it was somewhere in the mid 90's when I read that they were opening up domain name registrations to anyone who wanted them.  The day it went online the system was really wonky to get into, but I got into it and started searching around for cool names to register.  I remember spending a morning searching for all kinds of names that were available such as cars.com, beer.com, motorcycles.com, etc...  They were all available and for $75 or $100 ea. (can't remember exact price)I could have registered them all.  I remember talking to my wife about it because I wanted to register one for our last name.  We really didn't have the money so I didn't register any of them, but I still remember the exact screen with all of those domains asking me if I'd like to register the name because it was available.   Every one of them sold for millions of dollars during the dot com hyped days.   If I only knew then what I know now.  lol

Define very soon......since you've been predicting doom for 2 years.