Dow 8000?

[FIREd]

What's interesting with the way the unemployment rate is calculated is the fact that with millions of baby boomers set to retire over the next decade, the economy could lose millions of jobs over that period of time and the unemployment rate could stay where it is today... Plus I don't like the way the government's unemployment rate is calculated because I think it is bound (or designed?) to underestimate the real number of unemployed people...

[Arc]

Quote:

Originally Posted by newguy888 Dow falls under 12,000 as job losses roil Wall St. I know I know doom and gloom newguy, But things really are about to hit the fan in a big ugly way.

Better revisit the stimulus package - going to need more!

[GoodSense]

As Bush wisely said yesterday (quoting from a CNN Money article), "Economy has slowed."

Geez, really?? What foresight!

Seriously, though, this is the first time I'm glad we are getting a refund from the IRS. Having Uncle Sam hold my money means I wasn't buying depreciating stocks -- until now, of course.

[Razor]

I don't believe an 8000 DOW is out of the question. Had the FED not made emergency rate cuts we could be just about there by now.
I don't see any sector pulling the market up for awhile. The housing boom has turned to a bust, the tech market has leveled off and energy costs are on their way up. Oh and I forgot about the war we have to pay for.
Does anyone have an idea what will bolster the market and lead to prosperity for the next decade? Give me something to be optimistic about. Please.

[Notmuchlonger]

Look on the bright side everything will be at discount.

[JustCurious]

Razor, let me see if I can help you put things in perspective. In the last 100 years, we have had a major depression which lead to severe unemployment and soup lines, numerous recessions, two world wars, several regional wars (including Vietnam, Korea, Iraq I, Iraq II, Bosnia, Afghanistan), a major terrorist attack that destroyed the two tallest buildings in New York and shut down the financial markets for a week, an oil crisis in the 1970's, hyperinflation in the early 1980s, a stock market bubble that popped in 2000, a number of corporate scandals which lead to the implosion of companies like Enron and Worldcom, a savings and loan crisis which cause many S&Ls to go under, and many more economic challenges and crises, too many to mention.

And during that time, the stock market has averaged a 10% return every year.

[Razor]

Quote:

Originally Posted by JustCurious And during that time, the stock market has averaged a 10% return every year.

You know I heard that but have never seen the data to back it up. What market are you speaking about? Some say the DOW always goes up but the DOW stocks of today are not the same stocks of the past. Whenever a DOW stock starts to flounder, it is replaced with a more robust stock. So it it a true inicator of historical gains?
The NASDAQ is half what it was in 2000, will it ever average out to 10% gain? The S&P is still down from historical highs.
Will things always get better for the rest of our time on earth?
To say the market will always go up because it always has before doesn't do it for me, I need reasons it will go up. What happens in the market for the next 10 to 20 years is what matters to me. What happened 50 years ago is irelevant.

How did the market compare to the rate of inflation throughout history?

[FIREd]

Quote:

Originally Posted by GoodSense As Bush wisely said yesterday (quoting from a CNN Money article), "Economy has slowed." Geez, really?? What foresight!

Recent CNN headlines (I paraphrase):
Stocks at 18 months low
Job losses: worst in 5 years
Foreclosures hit all time high
Home equity falls below 50%
Dollar at a record low against the Euro
Consumer confidence lowest on record
New recession worry: bank failures
RE Prices could fall another 10%
Inflation fears on the rise
$100 oil - Just like a recession
Bush: "economy has slowed"
Bush: gas prices closing on $4 a gallon? nobody told me...

Somebody is drinking the coolaid, but I wonder who... Bush or the Media?

[JustCurious]

Razor, the data to support my 10% figure is found on page 13 in "Stocks for the Long Run", fourth edition, 2008, by Jeremy Siegel, Professor of Finance at the Wharton School at the University of Pennyslvania. In that book, he shows that the Annual Stock Market Returns from 1926 to 2006 was 10.1%. Not the Dow, the stock market.

[Razor]

Quote:

Originally Posted by JustCurious Razor, the data to support my 10% figure is found on page 13 in "Stocks for the Long Run", fourth edition, 2008, by Jeremy Siegel, Professor of Finance at the Wharton School at the University of Pennyslvania. In that book, he shows that the Annual Stock Market Returns from 1926 to 2006 was 10.1%. Not the Dow, the stock market.

So that's the entire stock market? Does that include stocks that went belly up and were delisted?

[Razor]

Don't Worry about Average Return for Stocks - Focus on Best Stocks for You
Don't be Misled by this Stock Cliche
Over time, the market has averaged about a 10% return annually.

How many times have you heard this statement or one like it to justify investing in the stock market? The statement is sometimes used to suggest that investing in the stock market will earn you a 10% return if you leave your money in long enough.
The problem with statements like this is that they are half-truths, often used out of context with beginning investors who don’t understand the complete truths. Problem One
The first problem is the statement suggests that you should expect a 10% annual return from your investments in the stock market. Really? Which investments?

People unfamiliar with investing may assume that buying a few (or one) stocks will set them up for this famous 10% return. I know this is true, because they e-mail me all the time when it doesn’t happen.
What Market?

The second problem is what do they mean by “the market?” It wasn’t the S&P 500 in 2004, because it didn’t return 10%.


You can buy mutual funds that track large portions of the market like the Russell 3000 or the Russell 5000, but they didn’t perform any better.

The fact is that by investing in individual stocks you are not buying “the market,” so what the market does is of little concern to you.
Your focus is on the portfolio you create and how it will perform in the future, because that’s all that matters. If you want to keep score by comparing your gains to those of some benchmark like the S&P 500, feel free to do so.
However, keep in mind investing is not about beating a benchmark. It is about securing your financial future. If the S&P 500 is up 2% and your portfolio is up 3%, that will be little comfort when you need real dollars to spend in your retirement. Conclusion

Long-term investors should focus on buying quality stocks that will meet your financial goals and let someone else worry about where their 10% went

[twaddle]

Quote:

Originally Posted by mark500 Have the cover stories of Newsweek or Time said we are in a recession yet? I haven't checked. If they have, it is time to buy stocks.

Who needs Newsweek? Isn't a "DOW 8000" thread enough to tell you we've hit the bottom?

Doesn't anybody remember how this board marked the top?

http://www.early-retirement.org/foru...hee-30317.html

[barbarus]

Lots of whistling as we walk past the graveyard here. You know, I bet if we all just talked real positive , why, that old economy would pick right up.
Yes sir. She'd just take on off. Yup. Just like a rocket.

Lets keep telling each other how swell things are gonna be real soon now.
That'll do the trick.
Nothing much to worry about here. No room for nervous nellie or gloomy gus on this smile-train. Unless you're a booster, don't apply.



Did that work?

[JustCurious]

Quote:

Originally Posted by Razor So that's the entire stock market? Does that include stocks that went belly up and were delisted?

Yes.

[Notmuchlonger]

Quote:

Originally Posted by barbarus Lots of whistling as we walk past the graveyard here. You know, I bet if we all just talked real positive , why, that old economy would pick right up. Yes sir. She'd just take on off. Yup. Just like a rocket. Lets keep telling each other how swell things are gonna be real soon now. That'll do the trick. Nothing much to worry about here. No room for nervous nellie or gloomy gus on this smile-train. Unless you're a booster, don't apply. Did that work?

What do you expect people to do? Cry and say the world is going to end?

[unclemick]

Quote:

Originally Posted by Notmuchlonger What do you expect people to do? Cry and say the world is going to end?

The world is ending - I heard they got snow somewhere in north Louisiana.

They are making snowmen like crazy and video taping before they melt.

A sure signal to buy on the dip? Or is that a dippy rumor? .

heh heh heh - . Balanced index - stay the course for retirement money and buy a few dippy hobby stocks to keep the hormones happy.

[Independent]

Quote:

Originally Posted by JustCurious And during that time, the stock market has averaged a 10% return every year.

I think it makes sense to say "during that time, the stock market averaged a 10% return". It would also make sense (though it's a false statement) to say "the stock market earned 10% every year". However, it doesn't make sense to say "averaged a 10% return every year".

The averages over very long periods include some extended periods when the (real) return on the market was less than zero. For example, the S&P 500 had a compound negative return for the 9 years from Jan 1999 through Jan 2008, or for the 17 years from Jan 1966 through Jan 1983.

[JustCurious]

Quote:

Originally Posted by Independent For example, the S&P 500 had a compound negative return for the 9 years from Jan 1999 through Jan 2008, or for the 17 years from Jan 1966 through Jan 1983.

I don't know where you got these figures from. The 10 year average annual return of Vanguard's S&P 500 fund through February 2008 is + 3.99%.

https://personal.vanguard.com/us/fun...BarChart=false

During the same period, Vanguard's Total Stock Market Fund had an average annual return of + 4.46%.

https://personal.vanguard.com/us/fun...BarChart=false

[al_bundy]

when you account for inflation it's negative

[JustCurious]

First, all return figures are nominal. Second, the returns are positive even taking inflation into account. Inflation has not averaged more than 4% per year for the last 10 years.