Online poll tells us why stock markets are outperforming
This is an online poll created by Sharesinv.com on their Facebook event page. They target stock market investors and speculators in Singapore. If the results of this poll (still open) among Singaporean stock investors is indicative of larger sentiment, then it tells us why stock markets around the world continue to rally despite weakening economies, systemic financial risks coming from Deutsche Bank, bubbly valuations and mounting geopolitical uncertainty.
The poll was put up in Chinese.
This is what is says
If interest rates for bank deposits go to negative, you will…
Option 1. Buy stocks especially high dividend yielding stocks (27 responses)
Option 2. Buy gold and other precious metals (5 responses)
Option 3. Put money into foreign currencies that preserve value (3 responses)
Option 4. Trade HSI/DAX (2 responses)
Option 5. Store money at home in a home safe deposit box (1 response)
Rush for positive yield of any kind
This is how I see read the poll and its outcome:
- I think the options available just about cover every possibility that is available to investors although sovereign bonds, corporate bonds are missing.
- The poll is missing an ‘all of the above’ option.
- Option 1 is most popular and explains why global stocks are rising – all part of rush to pin down positive yield of any kind.
- There is a cultural, historic reason for individuals to go into Option 2. It is a reason why gold and silver are revising into bullish trend. The way I see it, as long as the current crew of central bankers remain in charge, they will double, triple down. ZIRP, NIRP all coming soon. So gold will be hammered down until it cannot be hammered anymore and then we will see 2011 repeating or maybe even higher.
- Option 3 explains why currencies like AUD and NZD that still has a positive yield tends to outperform whenever risk-on market sentiment is turned on. I have also written about the merits of protecting value through forex diversification.
- Option 4 is curious. Referring to speculation?
- Option 5 explains why safes are running out in Japan and Germany. It also explains why the Swiss are hoarding large notes as well as ECB’s decision to stop circulation of €500 bill although the reason given was “taking into account concerns that this banknote could facilitate illicit activities.“