S&P at 2,000 .. what's next

[jetpack]

With the S&P hitting 2,000 today. I'm curious what you all think will be next,
and what's the sentiment of people FIREd

 

[Chuckanut]

I might be time to take out next year's withdrawal. You know... Sell high.

 

[ripper1]

Just staying the course and rebalancing when necessary. So I am in the don't know/don't care camp.

 

[David1961]

I'm focus more on where stocks will be 20-30 years from now. If it does go to 1500, I think it will be a buying opportunity.

 

[robnplunder]

I am not sure you will get whole lot of 1500 votes. This forum is full of optimists. I vote for 2500 b/c there was no 3000 option .

 

[mpeirce]

It's just a number. And pretty arbitrary one at that.

 

[2B]

To a certain extent, all indexes are managed with poorly performing companies quietly dropped and more promising companies added. To a certain extent, even indexers have somewhat "managed" funds.

I only hope that come January I rebalance a bundle out of equities into fixed income. That always feels better than the other way around.

 

[nash031]

One of my first posts on this forum last summer was questioning someone who didn't think the S&P would hit 2000 before the year 2020. I pointed out that, at the time, that would've required less than 3% annualized growth and that I figured it would happen much sooner than that. I also commented that we might see 3000 before 2020...

The overarching point here is that 2000 is just an index number. In itself, it's meaningless. Just like your portfolio, the first 1000 was the hardest, and now we'll see the S&P climb to *GASP* 3000 over the course of the next five to seven years (seven years would require just 6% annualized). And you know what will happen then?

It'll keep going up.

 

[ripper1]

One of my first posts on this forum last summer was questioning someone who didn't think the S&P would hit 2000 before the year 2020. I pointed out that, at the time, that would've required less than 3% annualized growth and that I figured it would happen much sooner than that. I also commented that we might see 3000 before 2020...

The overarching point here is that 2000 is just an index number. In itself, it's meaningless. Just like your portfolio, the first 1000 was the hardest, and now we'll see the S&P climb to *GASP* 3000 over the course of the next five to seven years (seven years would require just 6% annualized). And you know what will happen then?

It'll keep going up.

Doesn't seem like a stretch to me.

 

[mpeirce]

It'll keep going up.

That's what annoys me when the press trumpets a new "historic high" in some economic number. That's normal.

 

[Andre1969]

Well, the last two times the S&P got to around 1500, recession hit afterwards and it fell back to around 800 or so. That's a 47% drop...pretty scary stuff. But, then it came back, like it always does eventually. But, the third time was a charm, and it went to 1500 and kept on going.

I'm sure there's going to be some drops here and there, but throw me in the camp that predicts it hits 2500 before it hits 1500.

 

[nash031]

Well, the last two times the S&P got to around 1500, recession hit afterwards and it fell back to around 800 or so. That's a 47% drop...pretty scary stuff.

Sadly, there appear to be people out there who think this this is causation, when in fact it's not even correlation, at least not in the direction they think it is.

 

[RetireAge50]

Higher seems to be a good bet as it seems to double every 10 years (plus you get dividends):

August S&P 500

2014 2,000
2004 1,089
1994 464
1984 164
1974 76

But I voted Don't Know/Don't Care as I have no idea where it will go (especially in the shorter periods).

 

[audreyh1]

To a certain extent, all indexes are managed with poorly performing companies quietly dropped and more promising companies added. To a certain extent, even indexers have somewhat "managed" funds.

I only hope that come January I rebalance a bundle out of equities into fixed income. That always feels better than the other way around.

+1, although, so far, the other way has usually turned out to be a great buying opportunity.

 

[Andre1969]

Sadly, there appear to be people out there who think this this is causation, when in fact it's not even correlation, at least not in the direction they think it is.

Yeah, it's easy to start putting too much thought into those simplistic patterns. And I'll admit, once the Dow started getting back up to 14K, I got a little worried because of what happened the last time that happened. But, here it is now, back over 17K again.

Anyway, even if it did drop back to 1500 points, that's only a 25% drop. It'll come back. Historically, I wonder how often the S&P sees a 25% or greater drop, before taking an upward turn again? I tried looking at the graph that Yahoo finance plots, but because of recent data, everything before around 1995 or so just looks flat. However, taking some closeup slices in history, it looks like it dropped about 50% in 1973-74. And in '69-70 there was a roughly 30% drop, although that one seemed a bit more drawn out.

I'm sure there were other bad times, but I didn't feel like searching through every little timeframe. Also, I heard that the '57-59 era was really bad...main reason I know about that recession is that I'm into antique cars, and '58 was one of the worst years since the Great Depression for the US auto makers...at least until 1982-83. And usually, the economy and auto industry are fairly closely tied. Still, it looks like that era only saw a 17% contraction in the S&P. And, it bottomed out in late 1957.

So I'd guess that, overall, a 25% drop in the S&P is a relatively uncommon occurrence?

 

[ERD50]

I dunno, but the next OTM call on SPY for this week is 202.50, but only going for ~ 6 pennies.

-ERD50

 

[RetireAge50]

When does it expire?

 

[frayne]

What comes next, 2001.

 

[audreyh1]

What comes next, 2001.

Already happened.

 

[mickeyd]

I happen to be in the process of changing my AA from 60/40 to 50/50 that was planned years ago. Am I glad that stocks are at/near an all-time high? Sure am.

I love it when a plan comes together.

 

[Chuckanut]

I am terrible at predicting the market. So, I resist the temptation to sabatoge my investments by just adjusting my asset allocation to reflect the ups and downs of the market. Occasionally, if it is near the time I make my yearly withdrawal to support my extravagent spending style, I make make it a bit early in the belief that nobody ever went broke taking a profit.

 

[flyingaway]

2500 for sure, because there is no time limit given.

 

[easysurfer]

I put down don't know/don't care. It is fun when the dow reaches a milestone but that isn't going to sway my investment plans any. The milestone is just a number.

 

[FUEGO]

Don't know, don't care. I bet in 20 years it will be over 2500 and I'll have collected ~2% or so in dividends each year (and that dividend income will grow at least at the rate of inflation over the next 20 years).

 

[Palmtree]

I was a little nervous with our AA at 65/35 so I decided to move 5% over to bonds. I'm 54 and plan on ER'ing next June. 60/40 lets me sleep well.