How Long Will It Take....

[ferco]

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?

 

[OAG]

First Question: 13.26 Years.
Second Question: No response as I am long RE.
I thought this question was already asked a couple of times.

 

[LOL!]

I think OAG is right on #1. The NASDAQ has not seen its year 2000 levels yet. I think it will take 2 or 3 presidential election cycles to have a chance of getting back to previous highs.

I would not be "focusing" my investment dollars anywhere, but would be following my asset allocation plan. A reasonable portfolio with a legitimate low-expense ratio asset allocation is described here: http://www.retireearlyhomepage.com/tithe.html

 

[W2R]

First question: I think OAG has nailed it - - 13.26 years. What my answer is based on? It's a SWAG based mainly on a lifelong history of bad luck.

Second question: I am retiring in November, and so right now I am following my financial plan (devised in 2007) almost completely. The one difference is that I do have more money than planned in treasury MM (some of this money is destined for bond funds and/or CD's at some point but I haven't done it yet). I don't have separate pre-retirement and post-retirement financial plans at this point, because I am so close to ER.

So what am I buying these days? Savings from my salary are now going to my bank accounts and staying there. I do not count these bank accounts as part of my AA since they are earmarked for moving, possibly a new car, some new furniture, and similar one-time expenses during my first year of ER. Once I have sold my house, bought another house up there, and moved and settled, I will upload any excess to invest.

Since the September/October crash I have rebalanced by buying equity index funds (VTSAX, VFWIX), Wellesley (VWIAX), and the TSP treasury bond fund (G Fund). I am maxing out my TSP, and buying equity funds and Wellesley as needed to get the percentages called for in my financial plan.

Buying equity funds was hard to do when they seemed to be nearly in freefall, but I DCA'd a little and eventually got the percentages I needed. Buying Wellesley was easy to do since I love the dividends.

Later this year I will be maxing out my tiny Roth which is my "play investing" account, where I do what I want to. I'll probably put this year's $6K into a small business index fund. My Roth is performing abysmally (lost 49% of the $16K invested so far) so I would recommend that you avoid doing that.

 

[ziggy29]

Ho-hum. Down another [-]120[/-] 160.

 

[RonBoyd]

What is your estimate as to how long it will take for the market to get back

Soon.



Very soon

 

[dmpi]

I think it'll take 4-5 years to hit the bottom, and another 8 years to slowly climb back. So my official answer is 12.5 years. In the meantime I think this county will see deflation, inflation, stagflation, and then self-flagellation.

 

[MichaelB]

First Question: 13.26 Years.
Second Question: No response as I am long RE.
I thought this question was already asked a couple of times.

Yes, but is that 13.26 years from today or from its closing high on 10/9/2007?

 

[OAG]

Yes, but is that 13.26 years from today or from its closing high on 10/9/2007?

I will tell you which when it hits 14,000 again.

 

[FIREd]

I don't know when the market will make new highs. What I know is that, when planning for retirement, I am now factoring in zero growth from the stock market from now to the time I hopefully retire (around 2020-2022). I am counting solely on interests and dividends to more or less keep up with inflation during that time. I hope that the next secular bull market will be underway by the time I pull the plug.

 

[Dawg52]

By the end of the year.

 

[FANOFJESUS]

First question several years.

 

[NW-Bound]

What I know is that, when planning for retirement, I am now factoring in zero growth from the stock market from now to the time I hopefully retire (around 2020-2022). I am counting solely on interests and dividends to more or less keep up with inflation during that time.

Optimistic, aren't we?

Just kidding!

Buy, buy, buy...

 

[W2R]

By the end of the year.

OK, *now* it's time to back off on your medication....

 

[RonBoyd]

Want some numbers to go with that?

http://caseyresearch.com/pdfs/20090116_ObamaNewerDeal.pdf
(not a political piece, per se.)

The time will come, and probably during 2009, that the only way the U.S will be able to fund its deficits is to create money by printing it. The Treasury will have to sell bonds, and, in the absence of foreign buyers, the Fed will have to print the money to buy them. The consequence will be runaway inflation, increasing interest rates, recession, and inevitable tax increases on all Americans.

a widespread market recovery to previous levels is very unlikely any time soon, and that the slowing economy, rising interest rates, and severe downward pressure on the dollar will conspire to make profitable mainstream investing very difficult.

Yeah, it's just another "doom & gloom" piece. However, the numbers presented give support to a (pretty insightful?) overview of the problems ahead.

 

[OAG]

A the US should just repudiate its National debt and start all over. We sure are doing a good job of ignoring it as it stands now. That could start a war tho.

 

[clifp]

A the US should just repudiate its National debt and start all over. We sure are doing a good job of ignoring it as it stands now. That could start a war tho.

Over the last couple of centuries, most countries have repudiated their debt at least once (Russia every couple of decades) so we will be in good company.

For several years, only partly tongue-in-check, I've suggested the US allow T-Bills and Bonds to be redeemed for social security payments. Thus hosing foreign investor but not US citizens. The nice things is we have the biggest baddest military so foreigners will have tough time sending Uncle Guido over to collect.

 

[Bestwifeever]

By the end of the year.

You must have taken your meds early today

I say three years.

 

[haha]

The nice things is we have the biggest baddest military so foreigners will have tough time sending Uncle Guido over to collect.

Whoops! You forgot, China is the paymaster for our troops.

Ha

 

[Bikerdude]

My best guess (gut feel) is that we are in a 20 year "Bear Market" that started in 2000 and will end around year 2020. I think we will have one more cyclical bull before the final wash out.

 

[Dawg52]

You must have taken your meds early today

I say three years.

24 hour program. BTW, I'll take your 3 year prediction right now. Can I lock it in?

 

[cashbalancetrouble]

We will retest the bottom as long as public officials keep saying the 'sky has fallen, and is still falling'. 'The change' is an extreme unknown and will cause a new bottom, especially in financials, service, and health stocks. If the banks are tight with their money, the wealthy are too. They are all scared to spend. Some of us will see no trouble, these are those with recession proof jobs.

I do not expect the symptoms to change for two and one half years, that will be the beginning of the next politcal season. They have to stop then saying it is still getting worse to enable voters to continue loving them.

After six years of blame and name calling and not watching the theifs, did you expect any different? Get out of the market when best you can cuz it is done for the forseable future, other than cherry picking from the sideline. Take the best fixed income you can get.

 

[unclemick]

Hmmm - begining to look like 1966-1982 type yucky pucky - alas the Saint's never made the big time then either - I certainly hope Detroit doesn't beat them to the Superbowl.

The Norwegian widow continues to put her balanced index/a few good stocks - aka da SEC yield on full auto and spend her 3-5% SWR.

Heck I'm not getting any younger and somebody's got to spend and help the economy.

Handgrenade wise - I've been tap dancing in and around the 60/40 'policy portfolio' since 1977.

heh heh heh - 16th yr of ER.

 

[Dawg52]

Hmmm - begining to look like 1966-1982

heh heh heh - 16th yr of ER.

Yup. Well let's see......the DOW is basically flat for the last 10 years. Many seem to think we could be in a funk for the next 5 years, maybe longer. This could easily top 1966-1982 before all said and done. Crap, I'm sliding back into my 2008 state of mind. NO!!!!!!!!! I won't go there! NOOOOOOOOO!!!!!!!

Ok.........I'm better now.

 

[MichaelB]

I will tell you which when it hits 14,000 again.

Ahhh, just what I thought - another poser.

Dow hits 14K on June 3, 2011, at 1:43 PM. Any more questions?