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Originally Posted by Cut-Throat
When you say people, do you mean people on this forum or people in the World? Please elaborate for us.
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People who invest in the stock market.* *Most of the people in this virtual room included.* *Your expectations are probably lower than average, but you apparently believe that you are guaranteed positive returns if you stay in the market long enough.
I thought I made my views of the stock market pretty clear after 1000+ posts, but here it is again in a nutshell:
1) The market is basically a proxy for the economy, so one risk that just about everybody seems to dismiss is that the US economy will grow significantly slower than the historical rate.* *I think this is a very real possibility for a bunch of reasons.
2) We all know the dog walking on the leash story, but nobody seems to realize how long that leash is and how far the dog can wander.* *Even if our economy does well, there's a significant probability that the stock market can be beaten down for longer than you can afford to wait for the dog to follow Mr Economy again.
3) Even Bernstein/Swedroe/Bogle expect that if the dog doesn't stray too far, we're still looking at 6% nominal long-term growth due to inflated P/E's, reduced risk premium, recent bubbles, etc.
4) As early retirees, I think many on this board underestimate their ability to stomach volatility.* * All of us here have pretty good-sized nest eggs, so for us, keeping volatility and inflation at bay should be primary considerations (vs growth).* * The stock market isn't necessarily the best place to avoid volatility or inflation effects, and it's likely that few of us have really been tested in this regard.
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