Great Boom Ahead by Harry Dent

[dwk]

Has anyone read the Great Boom Ahead by Harry Dent. I belonged to an Investment club about 8 years ago and this model was briefly reviewed. Dent believes that economic growth correlates with population growth with a 45 year lag. Due to the buying power of the 40-45 year olds.

In looking at the below graph, should individuals planning to retire around 2008 be concerned or just adhere to the SWR and not worry about it.

While I don't believe any model can predict the market. At first glance, his approach looks like it deserves more review.

What do ya think

dwk

I apologize if this is a duplicate posting, the computer gremlins are out tonight.

 

[Spanky]

According to the graph, we should bail out of the market in 2009 and get back in 2025. I wonder if the demographics consider the possibility of increased emirgration and exports as comsumption may increase overseas?

 

[WhodaThunkit]

I read Den't book, and though it was good. OTOH, I do not believe in "single thread" planning. Dent's scenario might come to pass, and it might not. IMHO, the thing to do is to try to identify the N most likely scenarios, and have some kind of a plan to deal with each plausible possibility. Even this is not easy to do, of course, as plans are most often ruined by unpredictable paradigm shifts rather than the inability to project established trends into the future.

One technique that might help a little is to adjust your portfolio withdrawal rate each year, or every couple of years, based on market conditions, rather than draw a straight 4% (or whatever) of initial portfolio value adjusted yearly and forever for inflation. Various ways of doing this have been discussed on the forum. Also, some examples are given in the books by Henry Hebeler and by Stein and DeMuth (both of which books are quite good, in my view). Also in ESRBob's new book (which is quite good, also!).

 

[BearlyWorking]

Dent scares me a bit. I do not want to believe in demographic determinism, but he called it right on the 1990's stock boom. If another stock boom starts next year, then I will definitely prepare for a major recession. If not then I won't.

Mike

 

[Marketneutral]

Dent plays on peoples greed.

If you have greed, you will have need.