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The Next 10 Years
Old 06-28-2010, 01:36 PM   #1
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The Next 10 Years

First, my apologies. My wife and I began investing in our 401Ks about 10 years ago. We fully accept responsibility for the last decade - economics wise

Having said that, I'm finding it more and more difficult to support the buy-and-hold strategy when my wife and I discuss the best plan of action going forward. Just checking real quick, it looks like the DOW has increased ~12% total over the past 10 years or so. My wife in particular is beginning to think there might be better investment options out there - and I'm not so sure she isn't right anymore.

Assuming we don't take everything out of the market (which would, needless to say, cause the DOW to skyrocket, babies to sing, and a new and everlasting era of peace and prosperity), what do you think the next 10 years will look like?

Will we still be hovering around 10K-11K?

Will we return to more traditional returns and be somewhere around, oh I don't know, 20K+?

Will we be lower (gasp)?
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Old 06-28-2010, 01:42 PM   #2
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So all you are asking is for us to accurately predict the future?
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Old 06-28-2010, 01:44 PM   #3
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So all you are asking is for us to accurately predict the future?
Not necessarily accurately - but I thought sharing some predictions might be fun.
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Old 06-28-2010, 02:24 PM   #4
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What good are predictions if they aren't accurate?
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Old 06-28-2010, 02:28 PM   #5
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Not necessarily accurately - but I thought sharing some predictions might be fun.
This is not a useful way to spend time. For pure, beautifully designed time-wasting, I can highly recommend this thread:If you make a deal, do you stand by it?
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Old 06-28-2010, 02:32 PM   #6
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Not necessarily accurately - but I thought sharing some predictions might be fun.
Not if someone believes them and loses their shirt....
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Old 06-28-2010, 02:51 PM   #7
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Not necessarily accurately - but I thought sharing some predictions might be fun.
The trick is to find / have a strategy that makes good risk-adjusted returns that doesn't rely on having to know what may probabilistically happen that far in the future.
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Old 06-28-2010, 02:53 PM   #8
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Originally Posted by intent View Post
Will we still be hovering around 10K-11K?

Will we return to more traditional returns and be somewhere around, oh I don't know, 20K+?

Will we be lower (gasp)?
Yes ...
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Old 06-28-2010, 03:25 PM   #9
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What good are predictions if they aren't accurate?
I can pretty much guarantee you that the market will be up in the next 10 years, unless it's down or flat.
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Old 06-28-2010, 03:38 PM   #10
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Quote:
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My wife in particular is beginning to think there might be better investment options out there - and I'm not so sure she isn't right anymore.
Assuming we don't take everything out of the market (which would, needless to say, cause the DOW to skyrocket, babies to sing, and a new and everlasting era of peace and prosperity), what do you think the next 10 years will look like?
This must seem like a new and fascinating question, but there are thousands of financial newsletters making a living off their predictions. Well, technically they're persuading people to buy their newsletters. If they had to live off their predictions then there'd be a lot fewer financial newsletters.

The question of whether the market is going up, down, or sideways over the next ten years has been thoroughly analyzed on this board's last 687,000+ posts, and the answer is "Yes."

Perhaps a more relevant question would be what asset allocation would make you feel more comfortable in such a market... or would at least let you take a more long-term perspective on its performance. If you want guaranteed returns then you're going to end up in CDs and I bonds.

Again, the vast majority of ERs did not achieve that status through brilliant investing, but rather through sustained superior savings.
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Old 06-28-2010, 04:02 PM   #11
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You can go to the bank with this.
2010 - 2020 - bear market - bottom around 2013-16 a lot of people leave the stock market
2020 - 2039 or 40 - bull market
2039 or 40 - 2060 - bear market

2010 - 2020 - average into Vanguard's High Yield Corp bond fund - you will get a good yield for 10 years. Or FAGIX

2020 - move into stocks

I hope that helps.
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Old 06-28-2010, 05:04 PM   #12
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I guess the old saying should be modified to, "There is no such thing as a stupid question ... except for the questions posed in post #1 of this thread."

Fair enough.

Still, it seems most on this board and in general would argue that, if you want to retire early, expect a lengthy retirement (> 30 years), and you are relatively young, stocks should be a big part of your AA mix. I guess my question (between the lines) is, Is that still something most would agree with?
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Old 06-28-2010, 05:07 PM   #13
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Still, it seems most on this board and in general would argue that, if you want to retire early, expect a lengthy retirement (> 30 years), and you are relatively young, stocks should be a big part of your AA mix. I guess my question (between the lines) is, Is that still something most would agree with?
That's a reasonable question. Maybe you should start a new thread and form your question as a poll. I suspect you'll get more input using that format.
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Old 06-28-2010, 06:19 PM   #14
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Maybe you should start a new thread and form your question as a poll.
[Alex Trebek]I'm sorry, that may be the correct answer but it wasn't in the form of a question![/Alex]

But yes, I suspect most inflation-fighting fortunes lie in equities.

Dimson & Marsh concluded the same from studying a century of returns across sixteen countries in "Triumph Of The Optimists". Despite a few "singularities" like WWI, WWII, and the Great Depression.
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Old 06-28-2010, 06:37 PM   #15
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While I don't know if the market will be up, down, or flat over the next ten years, I do know that a good allocation should allow you to sleep at night.
Basically, don't sell ALL yor stocks, make sure you are diversified such that you can sleep well with the risks.
For some that means some bonds, some stocks, some gold. For others all stocks, but from a diverse group of sectors as well as some domestic, some foreign.
And for some others, it means lots of canned beans, guns and ammo
Personally, I like a wide variety of dividend stocks. The swings in the market are much easier to handle when the income stream is much more steady. But some people really hate the idea.

And welcome to the board!
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Old 06-28-2010, 06:54 PM   #16
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If you had a globally diversified portfolio of index funds that you started 10 years ago then you should be up a semi-decent amount with dollar cost averaging into the funds.

Admittedly my case isn't the same since I mainly started in mid 2007 and so missed part of the crash and the international boom before that, but I'm up ~30-35% since then with just dollar cost averaging. My roth on the otherhand is basically flat since that had lump sum invesments and I haven't been consistent with it.
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