The Market - How do the Sheep Expect to Retire?

[dbphoenix]

There is a difference between what a given stock or a portfolio of stocks might do over the long term and what the market might do over the long term. Over the long term, the market will be higher, if for no other reason than losers are expunged (you think the market would be where it is if every company that had ever been listed were still being carried?). Stocks, however, along with the companies they represent, disappear all the time.

Your friend may be absolutely on the mark. But it's more likely that he has a case of 99itis.

 

[inandlong]

Quote from vhehn:

no need to worry. harry dent says the dow will be 30000 by 2010.

Great! I will start buying a representative porfolio of Dow stocks, versus the diamonds because I want the dividends too, and continue buying. Every month just like a mutual fund. Dollar-cost-averaging! And it six-seven years I should have more than tripled the money. Not bad.... I'm in, and long!

 

[ElCubano]

Quote from alfonso:




No, not necessarily. Although traders generally love poking fun at "the fundamentals", they do actually count. So the answer to your question does very much depend on how business performs over the next 42 years. It's a tough call for much further beyond that time frame, but I think being bullish on American business for the next fourty years isn't too bad of a bet.

But lets not overlook the pain one may have to endure....thats key....over the long term ( 42 years ) one may say that the dow could be up over 1000% who knows, but how much would u let ur investment dwindle down to before cracking??? peace

 

[harrytrader]

And if Mr. Lips a private Swiss banker is right the middle class is being destroyed :

http://www.fromthewilderness.com/free/ww3/gold_wars.html

"The actual monetary order is a fraud. It punishes the workers and the
pensioners. It is destroying the middle class. Now inflation is not the
biggest problem but rather it is deflation.
To avoid both, the world must return to a gold standard. The gold standard
is the only "honest money." It can restart the world economy at the maximum
of its potential guaranteeing the savings and increasing the level of
investment. Furthermore, during times of a gold standard, historically there
are fewer wars."

Quote from harrytrader:

It is no secret that Stock Market FUNDAMENTALLY follows demography on long term. And more and more you will hear the bankers communication change and tell you PARTLY the truth - that any knowledgeable man should know at least if he has received a high level education at school (although I doubt that economy is too scarce in engineering school) : they will begin to tell you that stock market depends on demography but will pretend that people should put their money in stock market to "save" the market which is a lie: this is how money will evaporate even more quickly for one must be naïve to believe that the big financials know that stock market will decline because of liquidity that doesn't enter the market any more will not try to profit from the last bullish trend and short the market after.

Not accounting how people's money will continue to be pumped by stock market and other means :

http://www.fromthewilderness.com/free/ww3/080803_where_money.html

"Where Is The Money?

A New Interactive Web Site Hits You in the Face Over the Enron-Style Looting of the US Treasury and What It Means to You Personally"

 

[Free Thinker]

http://www.2000wave.com/article.asp?id=mwo081503

 

[m22au]

Good point raised so far - one individual's basket of stockholdings does not equate to the market.

I'm not sure if it's 100% sure that the overall US stockmarket will be higher in 42 years' time, although I would think that it is more likely it will be higher than lower.

Also is this on a nominal return or real return basis? Although stocks traced sideways for a mere 16 years from 1966 to 1982, it would have taken longer than 16 years to get one's money back on an inflation-adjusted basis.

Also there is the myopia of investing one's entire stock allocation to US stocks. A less risky approach would involve investing a portion in stocks of different countries, and hedging the currency risk. (Or deciding not to hedge, if you believe as I do that the US Dollar has seen its best days).

A multi-country stock allocation makes sense, if one looks at the potential for negative returns over a 42 year period. For example, the Japanese stockmarket may not reach new highs until after 2032, which is 42 years after 1990.

Now I can hear you say that "that won't happen here, this is the US", however that argument doesn't stand too well, there needs to be a more detailed reasoning to justify throwing all of one's stock allocation eggs into the basket marked "USA".

 

[dougcs]

Quote from TGregg:

I've always thought of the stock market as a giant Ponzi Operation. AFAIK, here are the three ways money gets in the market:

1. Companies pay dividends
2. Somebody buys stock
3. Companies buy back their own stock, or another's.

" [/B]

You might also ponder how GDP has risen from $238 billion in 1947 to the latest $10777 billion, a growth rate of about 7% close to what the stock market has done. It is economic growth.

You may be thinking that the stock market is or is similiar to a zero sum game, it is not. It is a positive sum game where the participants as a whole are able to take out more than they put in. Unless we get hit with deflation, then the reverse will happen.

DS

 

[harrytrader]

I don't agree in details. I agree that at term the market should crash like 1929 (both for technical and above all fundamental reason and fundamental is THE LAW for long term) but before there can still be a new record and I have already given the potential of my model: <FONT COLOR=GREEN>16000 on Dow Jones in 8 years</FONT>. Since in my model time can be compressed or expanded to half this mean that it could be done roughly in 4 to 12 years (this compression/expansion "explains" volatility - see also Mandelbrott articles in Scientific America untitled "Multifractals walk down Wall Street"). So <FONT COLOR=RED>after 2012/2013</FONT> the real threat could begin. So for years coming, and contrary to many elliotists today, I am rather optimistic for Dow Jones but it is an illusion in fact this rallye will exhaust the last liquidity and accelerate credit flood that is why in reality this is a very bad thing for the economy and the retirement of the baby boomers who will see their pension evaporate in this blowing top.

Quote from vhehn:

http://www.2000wave.com/article.asp?id=mwo081503