Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Future of stock market
Old 07-07-2005, 03:26 PM   #1
Dryer sheet aficionado
 
Join Date: Jul 2005
Posts: 28
Future of stock market

I am optimistic about the future of the Stock Market for the next decade. While many forecast doom and gloom I see a possible run up in the market which could be very similar to the late 1990’s. There are several factors pointing to this scenario which I see combining into a “Perfect Storm”.

1. Baby boomers must quickly begin to save for retirement.
The Baby boomers have been negligent in saving for retirement despite their high incomes. They have lived beyond their means and put off saving for their future. The median amount of savings earmarked for retirement is aprox. 50-60K, at some point in the not too distant future they will have to face facts and begin saving. The most likely vehicle will be to “max out “there 401K.* These monies will most likely be invested in growth funds hoping to make the most of the short time they have left.

2. 401 K’s effect on the Stock market
The run up in the Stock market between 1975 and 2000 can, in large part, be traced to the funds being funneled into Stocks via Mutual Funds in workers 401K accounts. Although most workers contributed relatively little to these accounts (3-4% on average) the constant inflow of funds helped the market produce impressive returns. Those returns generated attention by people who would not normally invest in stocks, and investment in the market increased until it reached a fevered pace in the late 1990’s. Then came the inevitable correction in 2002, since the bottoming of the market in 2002 the Market has shown steady progress from the low 9000’s to a present level of 10500.* Funds have still been flowing into the market thru 401K’s although, the market has had a much smaller piece of the pie with more funds going to bonds and money markets with relatively dismal returns.

3. Increased productivity due to technology* * *
In the go-go 90’s the promise of technology was almost intoxicating. It seamed as if new technologies were being developed daily and the future was going to be a wonderful place where machines did our work and we would all be free to enjoy our new found, easily gained wealth. Then came the reality check. By 2003 people were saying technology is dead. Somewhere in the middle ground is where the actual truth lies. Technology is far from dead and is steadily increasing corporate productivity and profits. The promise of technology to create new products and markets worldwide is alive and well.*
__________________

__________________
jimhcom is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Future of stock market
Old 07-07-2005, 03:28 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,387
Re: Future of stock market

Quote:
Originally Posted by jimhcom
I am optimistic about the future of the Stock Market for the next decade. While many forecast doom and gloom I see a possible run up in the market which could be very similar to the late 1990’s. There are several factors pointing to this scenario which I see combining into a “Perfect Storm”.
Go for it, JimHCom!! I think it is a sleeper!!

Ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Re: Future of stock market
Old 07-07-2005, 04:04 PM   #3
 
Posts: n/a
Re: Future of stock market

Sounds good to me. But if someone told me yesterday that today would bring a major terrorist attack in London, I would have predicted that the market would have gone down today.
__________________
  Reply With Quote
Re: Future of stock market
Old 07-07-2005, 04:08 PM   #4
Thinks s/he gets paid by the post
maddythebeagle's Avatar
 
Join Date: Jun 2005
Posts: 2,450
Re: Future of stock market

I dollar cost average into the market and have done fine. I dont have any problem with the stock market over the next decade, I just expect lower returns than average.
__________________
- Hurry! to the cliffs of insanity!
maddythebeagle is offline   Reply With Quote
Re: Future of stock market
Old 07-07-2005, 04:14 PM   #5
Thinks s/he gets paid by the post
JPatrick's Avatar
 
Join Date: Jun 2005
Posts: 2,494
Re: Future of stock market

You are right on the money.
I think we will get going this fall and not look back til 2010.
Of course, plan on a few rest periods along the way and I think we will see an important low sometime over the next 60 days.
__________________
JPatrick is offline   Reply With Quote
Re: Future of stock market
Old 07-07-2005, 04:30 PM   #6
Full time employment: Posting here.
 
Join Date: Oct 2002
Posts: 717
Re: Future of stock market

Quote:
Originally Posted by TromboneAl
Sounds good to me.* But if someone told me yesterday that today would bring a major terrorist attack in London, I would have predicted that the market would have gone down today.
If the event had happend on US soil, the market would have gone down. The US markets are US centric.
__________________
Random Reinforcement is Highly Addictive.
riskadverse is offline   Reply With Quote
Re: Future of stock market
Old 07-07-2005, 06:45 PM   #7
 
Posts: n/a
Re: Future of stock market

And if the market had gone down, say 1%, the news media would have said:

"Market slides amid fears of renewed terrorism. "
__________________
  Reply With Quote
Re: Future of stock market
Old 07-07-2005, 07:19 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Apr 2005
Location: Midwest
Posts: 1,580
Re: Future of stock market

Sounds like the Harry Dent School of Investing in here.
__________________
razztazz is offline   Reply With Quote
This time it's REALLY different. No, really!!
Old 07-07-2005, 07:49 PM   #9
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
This time it's REALLY different. No, really!!

Hey, I love these Point:Counterpoint debates!* Can I take devil's advocate?* "Jane, you ignorant slut!"...

Quote:
Originally Posted by jimhcom
1. Baby boomers must quickly begin to save for retirement.
Yes, or they'll be working for the rest of their longevity.* If they haven't figured that out by now, what will turn on the lightbulb over their heads?* Why should they suddenly abandon the status quo life of material excess for a monkish endurance of accelerated savings in hopes for a prosperous retirement?* After all, Business Week has claimed that they're "Old.* Smart.* Productive."* I'm counting on my fellow boomers to solve Social Security's funding problems with their enhanced lifetime's future contributions.

Quote:
Originally Posted by jimhcom
2. 401 K’s effect on the Stock market
If employment has steadily improved over the last few years, and if companies are starting to make profits and wages are starting to rise, then where's the equivalent rise in 401(k) contributions?* Is there a pent-up demand for stocks waiting to be unleashed at the current market valuations?* Or should we wait for Bill Gross' DOW 5000, when the demand undoubtedly will be at an absolute frenzy?* Maybe all that extra money is just going into interest-only mortgages & home equity lines of credit.

Quote:
Originally Posted by jimhcom
3. Increased productivity due to technology
Didn't productivity keep rising between 2000-2003?* Unfortunately no one was buying, or those productivity gains came at the expense of job cuts/outsourcing.* One can just as easily proclaim that increased productivity will eventually enable companies to sell everything for pennies without any employees.* If productivity is rising for everyone, where's the profit in that?

Before we break out in a chorus of "Happy Days Are Here Again", let me provide a couple quotes:

"There may be a recession in stock prices, but not anything in the nature of a crash. Dividend returns on stocks are moving higher.* This is not due to receding prices for stocks, and will not be hastened by any anticipated crash, the possibility of which I fail to see.* A few years ago people were as much afraid of common stocks as they were of a red-hot poker.* In the popular mind there was a tremendous risk in common stocks.* Why?* Mainly because the average investor could afford to invest in only one common stock.* Today he obtains wide and well managed diversification of stock holding by purchasing shares in good investment trusts.
-- America's celebrity economist
Irving Fisher
5 September 1929

"I see nothing, however, in the present situation that is either menacing or warrants pessimism. During the winter months there may be some slackness or unemployment, but hardly more that at this season each year.* I have every confidence that there will be a revival of activity in the spring and that during the coming year the country will make steady progress."
-- Secretary of the Treasury
Andrew Mellon
1 January 1930

BTW, as of today we're 97.5% equities (minus whatever Tweedy, Browne Global Value has in cash) and we're thinking of picking up another percent or two of individual stocks.* I don't really care where the market goes if we can continue to pick up investments at value prices.* So under those criteria we need the market to drop by at least 40%...
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: Future of stock market
Old 07-08-2005, 10:44 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Future of stock market

Quote:
Originally Posted by Nords
"Jane, you ignorant slut!"...
And general francissimo franco is still valiantly continuing his fight to remain dead...
Quote:
Didn't productivity keep rising between 2000-2003? Unfortunately no one was buying, or those productivity gains came at the expense of job cuts/outsourcing.
Whoops, stepped into my area there...a lot of the purchasing occurred in the late 90's, but a lot of the implementation, rolling out, customer familiarization and adoption, and business to business integration took years. So it may not be a directly correlated function of buying today and seeing productivity tomorrow.
[
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Future of stock market
Old 07-08-2005, 11:16 AM   #11
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Re: Future of stock market

Quote:
Originally Posted by Just not
So it may not be a directly correlated function of buying today and seeing productivity tomorrow.
I don't understand the alleged strength of the correlation between improving productivity and the stock market, either... if that's so darn intuitive, where's DOW 36,000?
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: Future of stock market
Old 07-08-2005, 11:22 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Future of stock market

Someone figures if productivity improves, so will earnings while costs drop.

On the other hand, I havent seen a financial talking head that isnt a complete moron.

Dow 36,000 is hiding right behind Dow 5000...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Future of stock market
Old 07-08-2005, 11:44 AM   #13
Thinks s/he gets paid by the post
tryan's Avatar
 
Join Date: Mar 2005
Posts: 2,449
Re: Future of stock market

I dare say the short term in up (cyclical bull), but the long term (~8years) is down (secular bear) as boomers PULL from retire funds to retire ... and, yes, a recession.

But who the hell really knows (when)?
__________________
FIRE'd since 2005
tryan is offline   Reply With Quote
Re: Future of stock market
Old 07-08-2005, 11:48 AM   #14
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,620
Re: Future of stock market

Quote:
Originally Posted by tryan
I dare say the short term in up (cyclical bull), but the long term (~8years) is down (secular bear) as boomers PULL from retire funds to retire ... and, yes, a recession.
These are the same boomers who haven't saved anything for retirement, and don't want to anyway because they're older, smarter, & more productive?

Quote:
Originally Posted by tryan
But who the hell really knows (when)?
That's the most accurate prediction this board has seen in a long time...
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: Future of stock market
Old 07-08-2005, 11:55 AM   #15
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 4,005
Re: Future of stock market

Investing is really simple. Figure out when the market is going up, and buy in. When the market is going to go down, sell out and sell short. Maybe even make some options or futures moves to leverage your money and make more of it. Simple.
__________________
justin is offline   Reply With Quote
Re: Future of stock market
Old 07-08-2005, 12:46 PM   #16
Recycles dryer sheets
 
Join Date: May 2005
Posts: 438
Re: Future of stock market

I know the future and I'm not telling.
__________________
rmark is offline   Reply With Quote
Re: Future of stock market
Old 07-08-2005, 02:36 PM   #17
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 2,083
Re: Future of stock market

Quote:
Originally Posted by rmark
I know the future and I'm not telling.
I thought I was the only one with the real crystal ball.
__________________
I look to the present moment because that's where I live my life.
MJ is offline   Reply With Quote
Re: Future of stock market
Old 07-08-2005, 02:40 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Feb 2003
Location: Mesa
Posts: 3,588
Re: Future of stock market

The market's definately going up . . .
then it's going down.

Or maybe the reverse.
__________________
sgeeeee is offline   Reply With Quote
Re: Future of stock market
Old 07-08-2005, 03:06 PM   #19
Dryer sheet aficionado
 
Join Date: Jul 2005
Posts: 28
Re: Future of stock market

"BTW, as of today we're 97.5% equities" Always look what a man does, not what he says.
__________________
jimhcom is offline   Reply With Quote
Re: Future of stock market
Old 07-08-2005, 03:23 PM   #20
Recycles dryer sheets
 
Join Date: Jul 2002
Posts: 420
Re: Future of stock market

No idea what the markets are doing short or long term. Cheers!
__________________

__________________
preben is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Approximate Vanguard Total Stock Market Index with S&P 500 and other fund(s)? Dude FIRE and Money 17 02-18-2007 08:25 PM
Another Bear Market Looming? Rosalita FIRE and Money 74 07-14-2006 10:45 AM
How Expensive is the S&P, Really Craig FIRE and Money 71 06-18-2005 10:21 PM
View of the Market from Doorstep of ER Donner FIRE and Money 21 04-25-2005 09:25 PM
Stock Market from 1966-1982 - Nowhere???? Cut-Throat FIRE and Money 8 10-30-2003 05:19 AM

 

 
All times are GMT -6. The time now is 04:27 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.