<p>Yes, money can’t reverse poor health, which can happen any time, anywhere. Money CAN help one get care if one does have health issues, but good health is indeed priceless. Having loved ones in your life is also priceless, at least to me.</p>
<p>Having enough money to be comfortable is much more pleasant to me than worrying about whether all my bills can be paid.</p>
<p>I am getting ready to re-balance stuff. Too much uncertainty out there.</p>
<p>How have tax increases affected the stock market in the past?</p>
<p>[Tax</a> Increases and Bull Markets - Yahoo! Finance](<a href=“http://finance.yahoo.com/news/tax-increases-bull-markets-110001080.html]Tax”>http://finance.yahoo.com/news/tax-increases-bull-markets-110001080.html)</p>
<p>“I am getting ready to re-balance stuff. Too much uncertainty out there.”</p>
<p>In what way?</p>
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<p>The author of the article conveniently ignores what actually kicked off the modern 25 year long expansion, which was the unexpected lowering of interest rates by the fed beginning in mid August 1982. The market shot up like a rocket, and the fed realized it was on to something and kept lowering. The expansion had to do with the drop in interest rates.</p>
<p>Look up the daily changes in the s&P and Dow for that period. (Its the equivalent of 1500 Dow points on today’s market…in August. About 11% for the month, and another 10% more over the next two. )</p>
<p>NYT had several front page stories over a period of several weeks talking about the stunning market “pop”. The lowered interest rates, and the informational content of a seachange in fed policy kicked off an historic expansion (set up, of course, by the previous 12 plus years of fighting inflation with excessive rates. Everyone in the market at the time was truly astounded. </p>
<p>All of the discussions of prosperity during that period have to consider that rates were falling the entire time. Valuations of assets were soaring, and it created the LBO and private equity markets. Those days are gone, with the long term treasury at 3% and the 10 year at 1.9. Not repeatable. Except in reverse, unfortunately.</p>
<p>Dadx, I like your post.</p>
<p>I agree that the decline in interest rates was very big. </p>
<p>Were you around then?</p>
<p>I was young and in the thick of things, which is why I remember it.</p>
<p>I have been constantly amazed at how no one grasps that the decline in rates (from artificial highs that took a decade to reach) over a three decade period was the underlying foundation for the dramatic expansion that we had. It has to be factored into any analysis.</p>
<p>Obviously, there is a lot of uncertainty surrounding interest rates. Then there’s uncertainty about the other shoe about to drop as our DC gladiators start slugging it out over spending. There is some notion afoot that that negotiation could actually lift the lid again on taxes. </p>
<p>And then there’s the complexity of Peas and PEP. Those are actually little ticking time bombs waiting to make a pop. Could impact all kinds of stuff – like real estate, for starters.</p>
<p>Oh, and then there’s the agonizingly slow “recovery” that just seems to never catch fire. It could simply go cold or maybe start smoking – uncertainty abounds.</p>
<p>Dadx, I agree with your post 4087 too. What part of the business were you in?</p>
<p>If interest rates go up, valuations of different asset classes are affected, but not just valuations, the cost of financing and the cost of running a business increase too. This could affect corporate profits.</p>
<p>I agree. I don’t see this talked about. Maybe, we will have these low interest rates forever.</p>
<p>Hmmm . . . .Dadx, how about considering that taxes affect interest rates? As in high taxes reduce money in the market and drive up interest rates and the converse? Of course we now live in the Land of Oz era with the guy behind the curtain controlling interest rates . . . and not the market.</p>
<p>Wow - I guess my memory is faultier than I thought. I just remember interest rates first going up under Volker to kill inflation.</p>
<p>Sewhappy, the stock market did fine in 1982, and taxes were not that much different.</p>
<p>When we actually have high taxes, we will see…</p>
<p>They did go up under Volcker to kill the inflation of the late 60’s and through the 70’s. And the dual energy crises added to the impetus to raise rates. </p>
<p>In summer of '82 Volker got scared by the Drysdale securities “crisis” and the Mexican financial crisis and decided that the inflation “cure” might be doing more harm than the “disease”. Rates were lowered unexpectedly, and the prosperity train got traction. It only had taken twelve or so years of restraint to set the stage.</p>
<p>I don’t spend a lot of time on this but my gut feeling is that artificially imposing low interest rates is what governments do to try to fend off economic meltdown. I don’t think they actually fuel a boom. I think they can keep us from the brink though, at least for awhile, maybe forever.</p>
<p>It’s a little hard to figure out exactly, but after refinancing everything to the current low interest rates, it will conservatively save me over a million dollars in mortgage interest.</p>
<p>As a bonus, the mortgages on my investment properties will be paid off an average of about 8-10 years earlier than the original mortgages, which means an extra 8-10 years of increased profit because I was able to refi with only modest increases in payment.</p>
<p>Of course, I have to pay taxes on all of that. Even so… there is a plus side to low interest rates.</p>
<p>There is a plus side for some and not so much for others. Not good for savers right now.</p>
<p>And I wlll be down over a million.</p>
<p>I am not sure why I have to subsidize you, notrichenough. The country’s policies are transferring wealth from me to you. </p>
<p>And you are the one complaining about taxes. Lol</p>
<p>Low interest rates are not good for me. ;)</p>
<p>Stop investing in T-bills and buy another house. ;)</p>
<p>I am supposed to borrow money while I sit on cash? :)</p>
<p>People like to complain that the other guy is getting something for nothing, or the other guy gets a subsidy, but when it comes to themselves, they earn theirs. Lol</p>
<p>I do appreciate your post notrichenough. At least you understand you benefit by some of these policies enacted by the Wizard of OZ. But you didn’t really earn “that million”.</p>
<p>That million is coming out of others pockets.</p>
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<p>I don’t see anyone else’s pockets being picked.</p>