Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 09-20-2022, 08:12 AM   #21
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 4,853
Are we going to start seeing pension problems again for cities/states if we get a decade of poor market returns or did they all fix that stuff up now and are gucci?
Fermion is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-20-2022, 11:03 AM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 8,810
Quote:
Originally Posted by Fermion View Post
Are we going to start seeing pension problems again for cities/states if we get a decade of poor market returns or did they all fix that stuff up now and are gucci?
They usually have a mix of asset classes, so it is not a given that they will do poorly if only stocks are flat. It also may depend on if the pensions they support are inflation adjusted and what happens to real interest rates. It would be hard to support pensions with 8% COLA increases with a fund making 4% from fixed income and a flat stock market.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 09-20-2022, 02:12 PM   #23
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 16,028
Quote:
Originally Posted by Fermion View Post
Are we going to start seeing pension problems again for cities/states if we get a decade of poor market returns or did they all fix that stuff up now and are gucci?
No problem, they can just raise taxes!
__________________
Everyone has a plan until they get punched in the mouth...philosopher Mike Tyson
aja8888 is offline   Reply With Quote
Old 09-20-2022, 02:51 PM   #24
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Land of Florida Man
Posts: 37,381
Quote:
Originally Posted by Fermion View Post
Are we going to start seeing pension problems again for cities/states if we get a decade of poor market returns or did they all fix that stuff up now and are gucci?
Of course, this is a rhetorical question, you already know the answer.
MichaelB is online now   Reply With Quote
Old 09-20-2022, 03:07 PM   #25
Recycles dryer sheets
 
Join Date: Mar 2019
Posts: 273
Quote:
Originally Posted by SecondCor521 View Post
I'll take the over for $100, Alex.
I'll take the other side of that bet.

Such a period of no progress in stock prices not only has precedent but has occurred 3 times over the past 100 years: 1929-1954, 1969-1982 and 2000-2013. 10 years seems short given the magnitude of the parabolic rise in equities from 2009-2021.

Maybe it happens, maybe it doesn't. But it is not an "out there" prediction.
jldavid47 is online now   Reply With Quote
Old 09-20-2022, 03:23 PM   #26
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Land of Florida Man
Posts: 37,381
Peter Bernstein was an expert on investment and portfolio risk and institutional risk management. He said that a long period of low returns was not characterized by low annual returns but instead by very high volatility. For those of us in full withdrawal mode high volatility is dangerous.
MichaelB is online now   Reply With Quote
Old 09-20-2022, 03:41 PM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 6,776
Quote:
Originally Posted by jldavid47 View Post
I'll take the other side of that bet.

Such a period of no progress in stock prices not only has precedent but has occurred 3 times over the past 100 years: 1929-1954, 1969-1982 and 2000-2013. 10 years seems short given the magnitude of the parabolic rise in equities from 2009-2021.

Maybe it happens, maybe it doesn't. But it is not an "out there" prediction.
It was a Jeopardy! reference, so not actually a wager offer.

But I'll make a note to post back on this thread 10 years from the date of publication of the article in the OP and see who would have won.

The article never clearly specifies which "market", so I'll just list two I would consider reasonable:

S&P500 closing 20220915: 3901.35
VTI closing NAV 20220915: 196.42

I'll even spot you the dividends and inflation and go on straight nominal price action.

This assumes, of course, that this message board, this thread, ^GSPC, and VTI, and my to do list can successfully navigate the next decade. We'll see.

Thankfully, 20320915 looks like it will be a trading day.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Thanks for the article
Old 09-22-2022, 05:52 AM   #28
Recycles dryer sheets
 
Join Date: May 2019
Posts: 319
Thanks for the article

Unless I missed it I wish he'd define "flat" - does that mean 0% returns for a decade? A minus for the decade? 5% average?

Anybody have a guest or interpretation as to what 'flat' will mean?

As a layman novice I look at old blue chips be it a PG or MCD or KO. -let's say the dividend is 2.5-2.6.... is that it? I just can't fathom that all of those resources, executives, workers, consumers for the next decade won't at least eke out another 2-3% in share growth average year.

Certainly I'm bias - my 'plan' calls for 5% annualized nominal in stocks
MichealKnight is offline   Reply With Quote
Old 09-22-2022, 06:55 AM   #29
Recycles dryer sheets
 
Join Date: Aug 2013
Location: Roanoke
Posts: 105
As long as Druckenmiller accurately predicted the market fluctuations for the previous decade, I'll be happy to consider his predictions about the next decade.
rwdflynavy is online now   Reply With Quote
Old 09-22-2022, 07:44 AM   #30
Recycles dryer sheets
 
Join Date: Sep 2021
Posts: 119
Quote:
Originally Posted by MichealKnight View Post
Unless I missed it I wish he'd define "flat" - does that mean 0% returns for a decade? A minus for the decade? 5% average?

Anybody have a guest or interpretation as to what 'flat' will mean?

As a layman novice I look at old blue chips be it a PG or MCD or KO. -let's say the dividend is 2.5-2.6.... is that it? I just can't fathom that all of those resources, executives, workers, consumers for the next decade won't at least eke out another 2-3% in share growth average year.

Certainly I'm bias - my 'plan' calls for 5% annualized nominal in stocks
I didn't read the article as it seemed to be behind a paywall, but I'll venture an opinion. I imagine he wasn't speaking with the precision some other posters seem to think. Likely his main point was that the next decade or so would not look like past decade. Many inexperienced stock buyers in the market that haven't been in a market like some foresee & where stocks don't always go up. Likely talking in broad terms -- that is indexes, not individual stocks -- & that is important distinction.

Also I'm in the school of thought that the resources you mentioned don't have direct bearing on market performance anyway. Again, many don't understand the forces that do have direct effect & how that is changing.

For those who are in accumulation phase, this is probably healthy long term. Will test out folks' plan for sequence of return risk though.
all4j is offline   Reply With Quote
Old 09-22-2022, 10:52 AM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 6,776
Quote:
Originally Posted by all4j View Post
I didn't read the article as it seemed to be behind a paywall, but I'll venture an opinion. I imagine he wasn't speaking with the precision some other posters seem to think. Likely his main point was that the next decade or so would not look like past decade. Many inexperienced stock buyers in the market that haven't been in a market like some foresee & where stocks don't always go up. Likely talking in broad terms -- that is indexes, not individual stocks -- & that is important distinction.

Also I'm in the school of thought that the resources you mentioned don't have direct bearing on market performance anyway. Again, many don't understand the forces that do have direct effect & how that is changing.

For those who are in accumulation phase, this is probably healthy long term. Will test out folks' plan for sequence of return risk though.
Here's a link which bypasses the paywall:

https://12ft.io/proxy?q=https%3A%2F%...entral-bank%2F

He doesn't define "flat" or "market" or "decade" - at least the article doesn't specify that I saw.

Most market prognostications that are made public have similar weasel conditions. I believe this is partly so that the prognosticators can claim victory more often and maintain their prognosticator roles. Sometimes these predictions result in fame and fortune. And if you make enough of them for long enough, eventually you'll be right.

I appreciate precision in predictions so they are testable, which is why I defined each of those terms in post #27.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 09-22-2022, 11:07 AM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 8,810
One thing to keep in mind is that interest rates, until recently, were declining in real and nominal value, worldwide since the 1980s. That pushed people into equities because fixed income was so low, and bond prices went up and up as the yields went down. That trend is now reversing in a significant way for the first time in several decades. So this time may not be different from a very long historical view but it is different since the 80s. Bill Bengen, the 4% rule guy, says it hasn't happened before in his models and he is moving to cash. High inflation and rapidly rising interest rates are a different global trend since mutual funds started becoming popular in the 80s and 90s. Interesting times.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 09-22-2022, 11:26 AM   #33
Thinks s/he gets paid by the post
 
Join Date: Aug 2016
Location: Northern Virginia
Posts: 4,839
His premise is that deglobalization (AKA "reshoring") will raise inflation and Fed policies will be more restrictive in the face of higher inflation.

That is almost a contradiction on its face. I guess he feels these more restrictive Fed policies will fail to reduce inflation?

That is true if government keeps spending.

Having said that, many folks have predicted lower returns over the next 5-10 years due to high starting PE's. That was the prediction in 2015 and of course it has not played out that way. And of course PE's have fallen here causing 5-10 year forecasts to improve (although not sure I like pain now and gain later).

Bottom line: I did not find anything new here. I expect lower returns than recent history over the next 5-10 years. No news flash there.
Montecfo is offline   Reply With Quote
Old 09-23-2022, 09:14 AM   #34
Thinks s/he gets paid by the post
 
Join Date: Jun 2017
Location: Western NC
Posts: 3,640
Quote:
Originally Posted by jldavid47 View Post
I'll take the other side of that bet.

Such a period of no progress in stock prices not only has precedent but has occurred 3 times over the past 100 years: 1929-1954, 1969-1982 and 2000-2013. 10 years seems short given the magnitude of the parabolic rise in equities from 2009-2021.

Maybe it happens, maybe it doesn't. But it is not an "out there" prediction.
Meaningless since this comparison ignores dividends.

Some structure their entire investing strategy around them.

They were especially helpful to investors after the 1929 crash.
ncbill is offline   Reply With Quote
Old 09-23-2022, 09:18 AM   #35
Recycles dryer sheets
 
Join Date: Mar 2019
Posts: 273
Quote:
Originally Posted by ncbill View Post
Meaningless since this comparison ignores dividends.

Some structure their entire investing strategy around them.

They were especially helpful to investors after the 1929 crash.
Wrong. The indexes are adjusted for dividend payments. And even if they didn't it would only shorten the period of pain by a year or so.


Beyond that, many dividend paying companies either cut the dividend to survive or went bankrupt leaving you with nothing. If you think your dividends are safe during a prolonged bear market/economic contraction you are delusional.
jldavid47 is online now   Reply With Quote
Old 09-23-2022, 12:20 PM   #36
Thinks s/he gets paid by the post
 
Join Date: Jun 2017
Location: Western NC
Posts: 3,640
Quote:
Originally Posted by jldavid47 View Post
Wrong. The indexes are adjusted for dividend payments. And even if they didn't it would only shorten the period of pain by a year or so.


Beyond that, many dividend paying companies either cut the dividend to survive or went bankrupt leaving you with nothing. If you think your dividends are safe during a prolonged bear market/economic contraction you are delusional.
If you're claiming the 1929 market took until 1954 to recover, that's not adjusted for dividend payments.
ncbill is offline   Reply With Quote
Amtrak
Old 10-01-2022, 12:48 PM   #37
Recycles dryer sheets
 
Join Date: May 2019
Posts: 319
Amtrak

Quote:
Originally Posted by copyright1997reloaded View Post
Amtrak?
Just did a quick Philly to NYC on Amtrak. This is not a travel forum so I won't detail the utter jackasserie of the Amtrak folks. Let's just say - it made flying and airports look heavenly to me - never thought that would happen

However....one thing I found curious on out bound and return:

NO I.D CHECK. None. NO bag check. None!

Philadelphia. Washington DC. New York City - just a few places Amtrak touches.

Go figure....
MichealKnight is offline   Reply With Quote
Old 10-01-2022, 01:55 PM   #38
Full time employment: Posting here.
 
Join Date: Aug 2019
Location: Anytown
Posts: 727
Quote:
Originally Posted by aja8888 View Post
That's been done already many times. It always ends up the same. Airlines have been going BK ever since we have had airlines. It's a bad business to start with. Not only here in the U.S., but all over the world.
Airlines were a good business when we had economic regulation by the Civil Aeronautics Board. Fares supported costs, airlines made a fair profit, and all was good except passengers paid MUCH more because that is what it took. From the very beginning in the 1920s it was recognized that airlines could never be profitable without government support. Congress passed the Kelly Act to spur development of airlines by paying them to carry the mail. Later acts supported passenger traffic. To this day every airline operates under a "Certificate of Public Convenience and Necessity."

Once airlines were deregulated we saw bankruptcy after bankruptcy. Fares dropped and service suffered.

I am NOT in favor of returning to government regulation of air fares or economic regulation of airlines. But let's at least recognize the cause of the current mess.
SecondAttempt is offline   Reply With Quote
Old 10-01-2022, 06:55 PM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 11,017
Quote:
Originally Posted by tenant13 View Post
On the planes managed - hopefully - more competently by new airlines that will replace the ones we’ve been financing with our taxes for the last couple of years.
Quote:
Originally Posted by aja8888 View Post
That's been done already many times. It always ends up the same. Airlines have been going BK ever since we have had airlines. It's a bad business to start with. Not only here in the U.S., but all over the world.
I think we'll just eventually end up with one airline as weak airlines are gobbled up and consolidated. At that point, we'll not only have lousy service but much higher prices. YMMV
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is online now   Reply With Quote
Old Today, 09:01 AM   #40
Thinks s/he gets paid by the post
Rianne's Avatar
 
Join Date: Aug 2017
Location: Champaign
Posts: 3,925
Any thoughts on International? We've been stable long-term investors in index funds. The only negative returns are VTIAX.
__________________
"Do not go where the path may lead, go instead where there is no path and leave a trail."

Ralph Waldo Emerson
Rianne is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Your favorite stock for next decade DjBrown Active Investing, Market Strategies & Alternative Assets 40 02-12-2022 03:11 PM
UPDATE: Buffett Sees More Investments In Japan Craig FIRE and Money 2 05-13-2006 05:11 PM
Volcker Sees More Decline in Dollar Ahead Hyperborea FIRE and Money 11 12-06-2004 04:58 PM
Stock Market Crash This Decade? Tommy_Dolitte Young Dreamers 8 08-12-2004 05:13 PM

» Quick Links

 
All times are GMT -6. The time now is 12:57 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.