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Old 02-08-2009, 09:16 PM   #21
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Well, I really was asking a question and not administering a pop quiz.
And I really was answering your question.

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My imperfect memory of Dimson & Marsh (which I'm going to have to look up) is that stocks outperformed inflation in every 10-year period of the 20th century
A quick glance at the graph Maurice provided in his opening post will show you that this isn't true.

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Given the average recession of 12-24 months three or four times out of at least 30 years of retirement, I'd find it hard to forsake stocks for bonds.
I never said anything about foresaking stocks for bonds. In fact, on a year-end basis, stocks have also outperformed inflation in every 10-year period since 1974-1984 except for the most recent, 1998-2008. In all but three (1992-2002, 1997-2007, and 1998-2008) of those ten-year periods, stocks also out-performed long-term treasuries.


BTW, my results are all pretax.
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Old 02-09-2009, 06:59 AM   #22
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You are kidding right? The second worse economic conditions in the last 100+ years and you don't think a balanced fund that only dropped 15% is good. I'd love to have my portfolio down only 15 percent instead of 30%.
I see your point, although, from my newbie vantage point, Wellesley performed relatively well last year because of its dominant bond holdings. I'm considering Wellesley to combine with my Wellington holdings but am also considering Vanguard Total Bond Index, which was +5% last year.
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Old 02-09-2009, 09:12 AM   #23
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Whoo-hoo! This is the first 10 years of my investing career ... if I can stomach this, I should be OK. After all, it can't get worse than this.



Can it?
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Old 02-09-2009, 09:28 AM   #24
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Whoo-hoo! This is the first 10 years of my investing career ... if I can stomach this, I should be OK. After all, it can't get worse than this.



Can it?
The baby boom generation is just NOW beginning to approach retirement age. Just wait until all the consumption and productivity of my generation and their effects on the economy begin to diminish...
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Old 02-09-2009, 10:31 AM   #25
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The baby boom generation is just NOW beginning to approach retirement age. Just wait until all the consumption and productivity of my generation and their effects on the economy begin to diminish...
I wouldn't count on that....for everyone of you FIRE guys there are 10 others that can't help themselves, and will self-liquidate or borrow into retirement oblivion........I think reverse mortgages will be the bubble of 2010 and beyond.......
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Old 02-14-2009, 10:23 AM   #26
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I saw this article this morning and think the analysis is really interesting. Anybody have a spreadsheet that does this monthly calculation yet?

It looks to me like the return over the previous 10 years might get worse over the next 18 months, as between Feb 1999 and Aug 2000, the S&P 500 gained 25.8%. Unless the market can gain its footing again soon, we may be seeing back calculated 10 year returns continuing to set new records (in a bad way) for a while.
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Old 02-14-2009, 10:56 AM   #27
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It looks to me like the return over the previous 10 years might get worse over the next 18 months, as between Feb 1999 and Aug 2000, the S&P 500 gained 25.8%. Unless the market can gain its footing again soon, we may be seeing back calculated 10 year returns continuing to set new records (in a bad way) for a while.
Yes, it stands to reason that unless the market rebounds quickly, the rolling 10-year return will keep getting worse until early 2010, which is 10 years after the tech bubble popped.
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Old 02-14-2009, 11:34 AM   #28
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Maybe the next decade will be the best ever?
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Old 02-14-2009, 11:40 AM   #29
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Maybe the next decade will be the best ever?
You never know. If you believe in "reversion to the mean" and the secular bear/secular bull cycles, then maybe the next decade could be pretty good. If you believe in "it's different this time," then maybe not.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 02-14-2009, 11:45 AM   #30
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You never know. If you believe in "reversion to the mean" and the secular bear/secular bull cycles, then maybe the next decade could be pretty good. If you believe in "it's different this time," then maybe not.
Tell us ziggy, what do you believe?

Ha
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Old 02-14-2009, 12:04 PM   #31
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You never know. If you believe in "reversion to the mean" and the secular bear/secular bull cycles, then maybe the next decade could be pretty good. If you believe in "it's different this time," then maybe not.
Like you Ziggy, I often look at the numbers and the graphs and the charts to try to vision what the future will bring. But then I remember that the "numbers" are really a function of the real world and not of their own historical values.

In the next decade, if we have negative issues with natural resources, war, industry, agriculture and all the other drivers of the "numbers," won't those factors be the true basis of our economic well being rather than "reversion to the mean" or any other mathematical/statistical description of past conditions?

Personally I see no reasons going forward (such as increased industrial output, technology that improves our utilization of natural resources, population control or other demographics, etc.) that would call for "good times" for the inhabitants of our fair planet. And this despite whatever anyone sees in the "numbers."
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Old 02-14-2009, 12:08 PM   #32
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Tell us Iggy, what do you believe?
I believe that I don't know. Why are you being so testy with me today?
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Old 02-14-2009, 12:14 PM   #33
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But then I remember that the "numbers" are really a function of the real world and not of their own historical values.
No doubt that this is true, it has to be. When the world starts to come out of the current slump if we should find that the oil price shoots up to $150 again we will have a big piece of negative information.

Unless of course we have positioned ourselves to profit from this.

But our entire human experience is tucked into some unknown period before entropy knocks us out for good. Historically it has been impossible to predict when we are down for the count, vs. just down for a while.

IMO, it's best on a personal level to let 'er rip, make the best decisions we can, have the most pleasure we can so that if we get whacked we can at least think that life had it's good points.

Ha
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Old 02-14-2009, 12:15 PM   #34
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I believe that I don't know. Why are you being so testy with me today?
Hello? it's testy to inquire as to what your opinion on this is? Maybe I respect your opinion and would like to know what it is?
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Old 02-14-2009, 12:15 PM   #35
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Personally I see no reasons going forward (such as increased industrial output, technology that improves our utilization of natural resources, population control or other demographics, etc.) that would call for "good times" for the inhabitants of our fair planet. And this despite whatever anyone sees in the "numbers."
Many times we see nothing before something major suddenly transforms society and the economy. I wouldn't bet against the human spirit in this regard, not in the very long term.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 02-14-2009, 12:19 PM   #36
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Hello? it's testy to inquire as to what your opinion on this is? Maybe I respect your opinion and would like to know what it is?
My apologies if I misinterpreted but it felt like I was being challenged. My crystal ball is as murky as anyone's, really. But maybe I could use it to break a vending machine and get free Doritos.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 02-14-2009, 12:26 PM   #37
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Many times we see nothing before something major suddenly transforms society and the economy. I wouldn't bet against the human spirit in this regard, not in the very long term.
It's sometimes difficult to get all that excited about "the very long term" when you're 61 and almost 3 yrs into retirement. I'm pulling for the next decade to allow DW and I to enjoy life as we planned.......

I believe in the timeframe I'm most concerned about, one's ability to increase the relative size of his/her slice of the pie will be more important than the size of the pie itself.

We have some difficult times ahead of us. It's truly difficult to vision the world's aggregate GDP/capita increasing in the near term.
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Old 02-14-2009, 12:52 PM   #38
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I listened to Jim Puplava's podcast this morning while I was exercising. He said money markets have beaten the S&P 500 since 1996 (13 years and counting).
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Old 02-14-2009, 04:16 PM   #39
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In the next decade, if we have negative issues with natural resources, war, industry, agriculture and all the other drivers of the "numbers," won't those factors be the true basis of our economic well being rather than "reversion to the mean" or any other mathematical/statistical description of past conditions?

Personally I see no reasons going forward (such as increased industrial output, technology that improves our utilization of natural resources, population control or other demographics, etc.) that would call for "good times" for the inhabitants of our fair planet. And this despite whatever anyone sees in the "numbers."
According to the many of the books I have read over the years, the various bull/bear cycles are directly related to the advent of new technology, followed by acceptance and widespread use of the technology, followed by over-purchasing of companies making use of the technology, followed by bubbles bursting and recession/depression periods. I don't think that right now I could make a prediction going forward on what might drive our future economy, but I am willing to predict that something will. Unless we're on the way out as a species, and even then I predict a number of dead human bounces.
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Old 02-14-2009, 04:24 PM   #40
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Maybe the next decade will be the best ever?
It may not be a shock that I don't know what the future will bring either, but regression to the mean does seem to have worked (in reverse) in the recent past:

The best 20 year period in history? 1980 - 1999
The worst 10 year period in history? 2000 - 2009 (probably).
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