I've been seeing hundreds (maybe thousands) of comments on Reddit and the interwebs about how markets are doomed and there's “no reason to buy right now” because of the obvious incoming mega-crash, prompted by inflation for some reason, where all stocks go to their “fair value” of negative zero.
My question is, if there is no reason to hold stocks, what is your to reason to hold USD? Why not invest that money in something that could increase in value? Like inverse ETFs for example? I get the argument that you're trying to “loose as little as possible”, but if you are so convinced that stocks will lose value that you're willing to sacrifice 8% buying power over the next year, wouldn't the smarter choice be to buy some inverse ETF? I'm just finding it really odd that the same people predicting hyperinflation are the same people holding cash… it's purely illogical.
If you think inflation will cool off, I don't think many people will disagree that markets will go up, or at least level off… In that scenario, it doesn't make sense to hold cash, because you'd miss out on obvious gains. If inflation does not cool off and instead increases, people are saying the market will go down further… If inflation continues upward, that means we would see 10%, 12%,, 15% or more inflation…. if that is the case, it will become more difficult to hold cash vs hard assets, like a house. However, housing prices are already at ATHs and with the fed hiking rates, housing prices are starting to decline and set to decline further… Investing in a house doesn't make sense because the fed will devalue it with hikes as soon as I buy… If they do not devalue my new house with rate hikes, stocks will go up because of fewer rate hikes…so it would still be better to buy stocks vs a house, because stocks have a long way up, vs the house which most likely won't see a sudden 20% gain.
No matter which way you cut it, I'm just having trouble justifying holding any cash right now.
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