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Reply to "Please someone explain to me about stock market + inflation"
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[quote=Anonymous]We have a lot of cash sitting around. About 400K (in the bank) - 800K (if we get out of some of our short term treasuries). We've been holding as we were looking at buying a second home (vacation home or something to hand down to our kids with rental/AirBnB for next 10 years). Now my husband and I are trying to figure out whether a home makes sense or dump it slowly back into the market. Here's my thinking, and please tell me how my thinking is flawed, because I'm really trying to think logically and I feel like I'm likely missing something. 1) Stock market "should" go up over the next year because 1) inflation - we're printing so much $$$ and people have no way to spend it all, so they're keeping or adding to the market. I don't think things are so over-priced in the market when we're printing 4-6T dollars. Everything is getting more expensive...so even though stock market is going up, total real value/buying power is not really changing. Thus market is not as much of a "bubble" as some might say. 2) If they raise interest rates, that should cause a correction, maybe 20%? But people will still have a ton of $$ floating around thus, #1 above still stands 3) Some might not like the crazy $ being printed and inflated to hell, so they start looking at other assets outside of the standard stock market options, maybe move $$ over to cryto market. But I don't see a 50% pull out, again maybe 20%. 4) Job market seems to be rebounding. Soon when unemployment $ runs out, more people will flood back into the work force and rebalance the current supply/demand in job market. I don't think we will go into major joblessness within the next couple years. Thus economy should still maintain growth. With the above assumptions, I think it's still a better use of our cash funds to go back into the market vs buying a home unless we can find a great deal in an ideal location. Thoughts? [/quote]
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