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Stop telling me the market is up 170%
Old 03-10-2014, 12:19 PM   #1
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Stop telling me the market is up 170%

Everywhere you turn, breathless reports are aging this bull market at five years and touting the total return based on the dead-cat-bounce after the mortgage investment debacle.

The recovery period has created some nice returns, but anybody that wasn't contributing money throughout had to wait until the Dow passed through about 14,000 to start seeing growth again.

Is a recovery a bull before it ever reaches a new high?
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Old 03-10-2014, 12:34 PM   #2
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Dead-cat-bounce?

It reached a new high, didn't it? It has been a bull market in my definition. The question to me and what others are asking is if the bull run will continue.
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Old 03-10-2014, 12:56 PM   #3
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Dead-cat-bounce?

It reached a new high, didn't it? It has been a bull market in my definition. The question to me and what others are asking is if the bull run will continue.
This is what I am wondering, too.

I cashed in some of my portfolio recently, to begin collecting cash at this great high in the Dow. (I am doing this in anticipation of possibly moving in a few years, a topic discussed in another thread.) With my rotten luck I suppose the market will therefore continue soaring even more than it has.

Buy, buy, buy.

Oh, and Gazingus, I would call it a five year bull market but then what do I know? Very little. If you want to call it a bull only since the Dow hit 14,000, then I think that is completely reasonable too. I also doubt anyone would argue with you, or with me... most are too busy counting their gains.
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Old 03-10-2014, 12:56 PM   #4
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To me the short term swings up and down are interesting to observe but not as important to my strategy. I agree the reports of +170% or -50% are out of context with the long term view.

Over the longer term the market keeps going up about 10% on average per year. IMO the market is currently right about where it is supposed to be.
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Old 03-10-2014, 12:59 PM   #5
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To me the short term swings up and down are interesting to observe but not as important to my strategy. I agree the reports of +170% or -50% are out of context with the long term view.

Over the longer term the market keeps going up about 10% on average per year. IMO the market is currently right about where it is supposed to be.
Isn't the market is always right where it is supposed to be? I would just like to know where it is supposed to be next year, but that info is privy only to the gods.
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Old 03-10-2014, 01:01 PM   #6
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Originally Posted by Gazingus View Post
Everywhere you turn, breathless reports are aging this bull market at five years and touting the total return based on the dead-cat-bounce after the mortgage investment debacle.

The recovery period has created some nice returns, but anybody that wasn't contributing money throughout had to wait until the Dow passed through about 14,000 to start seeing growth again.

Is a recovery a bull before it ever reaches a new high?


But it has been a 5 year 'bull'.... from what I heard, it was 5 years ago yesterday when the market hit bottom.... you might not like the definition, but it is correct...

Corrections are measured from the top of the market until it reaches a bottom... then you start another bull.... eventually you will get another correction (or worse)....


As always in investing.... YMMV....
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Old 03-10-2014, 01:24 PM   #7
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Funny, one of the investment newsletters I read was making the case that the current bull market started in 2011, not 2009. It is all a matter of definition.
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Old 03-10-2014, 01:28 PM   #8
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Over the longer term the market keeps going up about 10% on average per year.
Which years did you sample? I thought it was more like 6% - 7% over very long run. But I can live with either 6% or 10% gain.
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Old 03-10-2014, 01:31 PM   #9
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Funny, one of the investment newsletters I read was making the case that the current bull market started in 2011, not 2009. It is all a matter of definition.
Perhaps, it is trying to convince readers that the bull market can go longer. Not too many bull runs last past 5 years. Saying the current bull run is only in its 3rd year sounds like self serving for the investment community.
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Old 03-10-2014, 01:33 PM   #10
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There was an interesting "Lessons learned from the Bull Market" article in the WSJ this weekend. It mentioned that the standard definition of a bull or bear is a 20% rise or fall in the market over a period of time. If you change that to just 19%, we endured a bear in 2011, and the bull is only 2 years old.

It's all noise. I anxiously await my next bargain buying opportunity!
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Old 03-10-2014, 01:43 PM   #11
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There was an interesting "Lessons learned from the Bull Market" article in the WSJ this weekend. It mentioned that the standard definition of a bull or bear is a 20% rise or fall in the market over a period of time. If you change that to just 19%, we endured a bear in 2011, and the bull is only 2 years old.

It's all noise. I anxiously await my next bargain buying opportunity!
I see. I think someone is splitting hair on that one (3 year bull market claim). For all intents and purposes, the bull market run has been for 5 years and it is more than a dead-cat-bounce by any definition.

Personally, I am hoping we have 1 - 2 more years of the current run although we are overdue for a correction.
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Old 03-10-2014, 01:46 PM   #12
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Over the longer term the market keeps going up about 10% on average per year. IMO the market is currently right about where it is supposed to be.
Lets say I took a lump sum and deposited it in the market every birthday starting with my 18th. The annualzied S&P500 returns reinvesting dividends ( & adjusted for CPI) for each year's investment would be -

Feb95->Feb14 = 9.064% (6.598%)
Feb96->Feb14 = 7.645% (5.231%)
Feb97->Feb14 = 6.677% (4.328%)
Feb98->Feb14 = 5.345% (2.975%)
Feb99->Feb14 = 4.233% (1.842%)
Feb00->Feb14 = 3.649% (1.322%)
Feb01->Feb14 = 4.336% (2.099%)
Feb02->Feb14 = 6.086% (3.722%)
Feb03->Feb14 = 9.178% (6.812%)
Feb04->Feb14 = 6.581% (4.218%)
Feb05->Feb14 = 6.570% (4.290%)
Feb06->Feb14 = 6.355% (4.259%)
Feb07->Feb14 = 5.145% (3.131%)
Feb08->Feb14 = 6.843% (5.148%)
Feb09->Feb14 = 19.514% (17.298%)
Feb10->Feb14 = 15.149% (13.084%)
Feb11->Feb14 = 12.450% (10.535%)
Feb12->Feb14 = 16.692% (15.345%)
Feb13->Feb14 = 19.254% (18.823%)

Based on your 10% annual return statement and my window of reference, the bull market needs to go a lot further. These last two years have been great! If it weren't for them my retirement funds (adjusted for CPI) would be worth less than the initial contributions.
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Old 03-10-2014, 01:47 PM   #13
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I see. I think someone is splitting hair on that one (3 year bull market claim). For all intents and purposes, the bull market run has been for 5 years and it is more than a dead-cat-bounce by any definition.

Personally, I am hoping we have 1 - 2 more years of the current run although we are overdue for a correction.
Point is, we may have already endured one "correction" during the current "bull", and another one is coming. Could start tomorrow, could start in 2024. In any event, it's all noise. I don't intend to try to plan according to predictions, models, history, experts, etc., but that's just me.
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Old 03-10-2014, 01:50 PM   #14
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Isn't the market is always right where it is supposed to be? I would just like to know where it is supposed to be next year, but that info is privy only to the gods.
Oh no folks know where it will be in the next year. I get spam all the time from folks that know where it will be in a year. You just have to subscribe to their secret information.
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Old 03-10-2014, 01:51 PM   #15
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Which years did you sample? I thought it was more like 6% - 7% over very long run. But I can live with either 6% or 10% gain.
Yeah, I'm used to seeing 7% for the long term. I plan long term to 6% for no particular reason other than it makes sense to me.
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Old 03-10-2014, 01:52 PM   #16
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I used Schiller data over the last 30 years. Capital gain 7.5% + Dividends 2.5%.
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Old 03-10-2014, 01:59 PM   #17
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I used Schiller data over the last 30 years. Capital gain 7.5% + Dividends 2.5%.
Include inflation and you get the roughly ~7% real return I'm used to seeing.

I plan for 6, hope for 30!!
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Old 03-10-2014, 02:04 PM   #18
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According to Vanguard, the average annual return on stocks from 1926 to 2013 was 10.2%

https://personal.vanguard.com/us/ins...io-allocations
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Old 03-10-2014, 02:11 PM   #19
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I try to ignore such noise. Or at least put it in context. S&P 500 dropped 20% from Apr to Sept 2011. Many would describe that as a bear market. It was quite painful and downright scary that summer when the US was downgraded from triple A. Funny how nobody mentions that bear market period in these "5 year anniversary stories".
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Old 03-10-2014, 02:32 PM   #20
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OK, "the market" is not the DJIA. "The market" to me is a Total US Stock Market index fund with dividends re-invested. By that definition, "the market" is up more than 200% instead of a mere 170%, so I will stop telling you that the market is up 170%, because it ain't.
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