Stocks May Be Cheap, but Will Logic Say Otherwise?

Kimberly Watson, Editor in Chief
May 01, 2012 /

Warren Buffet recently made a statement to the affect that stocks appeared more appealing than gold or bonds!  One question being asked related to buying stock, is whether it is in fact cheaper than buying bonds. In a recent report, various investment strategists representing large brokerage firms stated that arguably, stocks were at a record low in comparison to bonds.

Some experts have expressed their belief that for many, this is an interesting argument regarding and buying stock, particularly at present when bond yields are low compared with price rises. With the stock market today at a low level, investors would like to place the market behind them.

There have been examples of related losses, caused by cheap stocks falling and without signs of a rise. Further observations determined that loss and gains depend on the time of buying stock and gaining for entering low. Some experts have queried whether a direct mathematical comparison is possible between earning yields on stocks and bonds! One answer given was that no support is offered by history, economics or logic.

There is skepticism by some regarding this situation, with the opinion there is no validity attached to it. However, a proviso to this was given by the addition that, it depended on whether a person was trying to sell their shares!

 

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