How Long Will It Take....

[Spanky]

What is your estimate as to how long it will take for the market to get back to it's high of 14,000. What do you base your answer on?
Secondly, if you are 5 years or less until FI / ER where are you focusing your savings / investment dollars over the next 5 years?

1. 8.365 years based on these assumptions: 7% APY, Dow is at bottom now @7,949.

2. I am trying to rebalance to 60/40 (equity/fixed-income) since the mix is at 40/60 now. In short, putting more money into equity.

 

[RonBoyd]

Here ya go, the NYTimes has taken all of the work -- and, of course, all the fun -- out of future-predicting with this easy-to-use tool:

Calculate Your Financial Comeback - Interactive Graphic - NYTimes.com

The accompanying article is here:

Optimism in Washington, but Pessimism on Wall St.

 

[jug]

It all depends when the next crop of suckers start to feel better and go on a sustained buying spree.

It will come back up, just needs time, how much time? Good question, Japan went wild and had its dead decade. We are in uncharted waters, life is shorter than you think, so just go out and enjoy.
jug

 

[Independent]

I don't know how long it will take, but I know how long it took a couple times in the past.

If you adjust the 1929 peak for inflation, it was 1956 before that price was matched. It was 1958 before it got that high "to stay". The 1966 peak was beaten temporarily in 1968, but it was 1992 before prices really recovered.

That looks like 27 and 28 years to recover, adjusting for inflation and ignoring dividends. I'd start the clock for this cycle in 2000, that means 2027.

But history never repeats itself, so I'm not making any predictions based on this. In particular, dividends were a bigger part of the returns in those days, the US position in the world economy is very different, we are expecting very slow workforce growth, and we seem to do everything more quickly these days. I just think it's interesting to note how long these cycles have been in the past.