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How Long Will It Take....
Old 01-20-2009, 08:07 AM   #1
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How Long Will It Take....

What is your estimate as to how long it will take for the market to get back to it's high of 14,000. What do you base your answer on?
Secondly, if you are 5 years or less until FI / ER where are you focusing your savings / investment dollars over the next 5 years?
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Old 01-20-2009, 08:10 AM   #2
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First Question: 13.26 Years.
Second Question: No response as I am long RE.
I thought this question was already asked a couple of times.
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Old 01-20-2009, 08:24 AM   #3
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I think OAG is right on #1. The NASDAQ has not seen its year 2000 levels yet. I think it will take 2 or 3 presidential election cycles to have a chance of getting back to previous highs.

I would not be "focusing" my investment dollars anywhere, but would be following my asset allocation plan. A reasonable portfolio with a legitimate low-expense ratio asset allocation is described here: http://www.retireearlyhomepage.com/tithe.html
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Old 01-20-2009, 08:42 AM   #4
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First question: I think OAG has nailed it - - 13.26 years. What my answer is based on? It's a SWAG based mainly on a lifelong history of bad luck.

Second question: I am retiring in November, and so right now I am following my financial plan (devised in 2007) almost completely. The one difference is that I do have more money than planned in treasury MM (some of this money is destined for bond funds and/or CD's at some point but I haven't done it yet). I don't have separate pre-retirement and post-retirement financial plans at this point, because I am so close to ER.

So what am I buying these days? Savings from my salary are now going to my bank accounts and staying there. I do not count these bank accounts as part of my AA since they are earmarked for moving, possibly a new car, some new furniture, and similar one-time expenses during my first year of ER. Once I have sold my house, bought another house up there, and moved and settled, I will upload any excess to invest.

Since the September/October crash I have rebalanced by buying equity index funds (VTSAX, VFWIX), Wellesley (VWIAX), and the TSP treasury bond fund (G Fund). I am maxing out my TSP, and buying equity funds and Wellesley as needed to get the percentages called for in my financial plan.

Buying equity funds was hard to do when they seemed to be nearly in freefall, but I DCA'd a little and eventually got the percentages I needed. Buying Wellesley was easy to do since I love the dividends.

Later this year I will be maxing out my tiny Roth which is my "play investing" account, where I do what I want to. I'll probably put this year's $6K into a small business index fund. My Roth is performing abysmally (lost 49% of the $16K invested so far) so I would recommend that you avoid doing that.
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Old 01-20-2009, 08:47 AM   #5
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Ho-hum. Down another 120 160.
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Old 01-20-2009, 09:38 AM   #6
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Originally Posted by ferco View Post
What is your estimate as to how long it will take for the market to get back
Soon.

Other End.jpg

Very soon

cc update.jpg
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Old 01-20-2009, 09:52 AM   #7
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I think it'll take 4-5 years to hit the bottom, and another 8 years to slowly climb back. So my official answer is 12.5 years. In the meantime I think this county will see deflation, inflation, stagflation, and then self-flagellation.
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Old 01-20-2009, 10:21 AM   #8
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Originally Posted by OAG View Post
First Question: 13.26 Years.
Second Question: No response as I am long RE.
I thought this question was already asked a couple of times.
Yes, but is that 13.26 years from today or from its closing high on 10/9/2007?
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Old 01-20-2009, 11:56 AM   #9
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Yes, but is that 13.26 years from today or from its closing high on 10/9/2007?
I will tell you which when it hits 14,000 again.
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Old 01-20-2009, 12:18 PM   #10
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I don't know when the market will make new highs. What I know is that, when planning for retirement, I am now factoring in zero growth from the stock market from now to the time I hopefully retire (around 2020-2022). I am counting solely on interests and dividends to more or less keep up with inflation during that time. I hope that the next secular bull market will be underway by the time I pull the plug.
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Old 01-20-2009, 12:31 PM   #11
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By the end of the year.
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Old 01-20-2009, 12:50 PM   #12
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First question several years.
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Old 01-20-2009, 01:02 PM   #13
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What I know is that, when planning for retirement, I am now factoring in zero growth from the stock market from now to the time I hopefully retire (around 2020-2022). I am counting solely on interests and dividends to more or less keep up with inflation during that time.
Optimistic, aren't we?

Just kidding!

Buy, buy, buy...
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Old 01-20-2009, 01:12 PM   #14
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By the end of the year.
OK, *now* it's time to back off on your medication....
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Old 01-20-2009, 01:20 PM   #15
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Want some numbers to go with that?

http://caseyresearch.com/pdfs/200901...aNewerDeal.pdf
(not a political piece, per se.)

Quote:
The time will come, and probably during 2009, that the only way the U.S will be able to fund its deficits is to create money by printing it. The Treasury will have to sell bonds, and, in the absence of foreign buyers, the Fed will have to print the money to buy them. The consequence will be runaway inflation, increasing interest rates, recession, and inevitable tax increases on all Americans.
Quote:
a widespread market recovery to previous levels is very unlikely any time soon, and that the slowing economy, rising interest rates, and severe downward pressure on the dollar will conspire to make profitable mainstream investing very difficult.
Yeah, it's just another "doom & gloom" piece. However, the numbers presented give support to a (pretty insightful?) overview of the problems ahead.
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Old 01-20-2009, 02:04 PM   #16
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A the US should just repudiate its National debt and start all over. We sure are doing a good job of ignoring it as it stands now. That could start a war tho.
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Old 01-20-2009, 02:15 PM   #17
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A the US should just repudiate its National debt and start all over. We sure are doing a good job of ignoring it as it stands now. That could start a war tho.

Over the last couple of centuries, most countries have repudiated their debt at least once (Russia every couple of decades) so we will be in good company.

For several years, only partly tongue-in-check, I've suggested the US allow T-Bills and Bonds to be redeemed for social security payments. Thus hosing foreign investor but not US citizens. The nice things is we have the biggest baddest military so foreigners will have tough time sending Uncle Guido over to collect.
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Old 01-20-2009, 02:16 PM   #18
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By the end of the year.
You must have taken your meds early today

I say three years.
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Old 01-20-2009, 02:17 PM   #19
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The nice things is we have the biggest baddest military so foreigners will have tough time sending Uncle Guido over to collect.
Whoops! You forgot, China is the paymaster for our troops.

Ha
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Old 01-20-2009, 02:39 PM   #20
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My best guess (gut feel) is that we are in a 20 year "Bear Market" that started in 2000 and will end around year 2020. I think we will have one more cyclical bull before the final wash out.
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