What's in store for the 2020's

[EvrClrx311]

A little perspective on the 11 year bull... which might be very helpful for the other young dreamers. I'm 37, so long term (mostly stocks) is my AA lean.

There is no doubt that the 2010's have been a good decade for investing. It's the only decade without a recession. According to a recent CNN Money article... the S&P 500 is up 250% as of today since December 31st 2009.

That said...

The 1950's gained 515% and the 1990's added 446%... in fact, when looking at this decade we are now exiting as a whole, it was pretty "average"... and also followed the worst decade in 100 years. The 2000's was -4%

So what's in store for the 2020's? I'm going to step out on a limb and say... a recession, and likely in the first 3 years... but those only last a few months to a couple years. Overall the 20's might actually return more than the last 10 years have. I'd say it's about 50-50 on that one

Wells Fargo Investment Institute, the S&P 500's cumulative total return over the decade...
1930's - 2%
1940's - 147%
1950's - 515%
1960's - 118%
1970's - 74%
1980's - 415%
1990's - 446%
2000's - (4%)
2010's - 253%

 

[JustCurious]

Could you cite to the article? I would like to see where they get their numbers.

 

[Bir48die]

Heads or tails. Your call.

 

[EvrClrx311]

Ran some numbers based on the Shiller Data, which account for inflation...

10 years ending in December 1889 returned 122.6%
10 years ending in December 1899 returned 71.8%
10 years ending in December 1909 returned 110.3%
10 years ending in December 1919 returned (17.6%)
10 years ending in December 1929 returned 353.1%
10 years ending in December 1939 returned 23.2%
10 years ending in December 1949 returned 39.5%
10 years ending in December 1959 returned 366.8%
10 years ending in December 1969 returned 64.9%
10 years ending in December 1979 returned (13.3%)
10 years ending in December 1989 returned 199.2%
10 years ending in December 1999 returned 291.8%
10 years ending in December 2009 returned (27.5%)
10 years ending in November 2019 returned 180.2%


what's interesting is that when you look at mid decade through mid decade, the numbers seem less volatile... I'm scratching my head over that.

10 years ending in January 1886 returned 182.7%
10 years ending in January 1896 returned 54.3%
10 years ending in January 1906 returned 172.4%
10 years ending in January 1916 returned 27.6%
10 years ending in January 1926 returned 49.3%
10 years ending in January 1936 returned 139.5%
10 years ending in January 1946 returned 71.6%
10 years ending in January 1956 returned 189.9%
10 years ending in January 1966 returned 148.8%
10 years ending in January 1976 returned (16.4%)
10 years ending in January 1986 returned 75.0%
10 years ending in January 1996 returned 184.9%
10 years ending in January 2006 returned 89.8%
10 years ending in January 2016 returned 54.5%

Guess I should have looked at January 2015 on back... but I would guess it's similar.

 

[EvrClrx311]

Could you cite to the article? I would like to see where they get their numbers.

Here you go:
https://www.cnn.com/2019/12/30/investing/premarket-stocks-trading/index.html

 

[Doribe]

A little perspective on the 11 year bull... which might be very helpful for the other young dreamers. I'm 37, so long term (mostly stocks) is my AA lean.

There is no doubt that the 2010's have been a good decade for investing. It's the only decade without a recession. According to a recent CNN Money article... the S&P 500 is up 250% as of today since December 31st 2009.

That said...

The 1950's gained 515% and the 1990's added 446%... in fact, when looking at this decade we are now exiting as a whole, it was pretty "average"... and also followed the worst decade in 100 years. The 2000's was -4%

So what's in store for the 2020's? I'm going to step out on a limb and say... a recession, and likely in the first 3 years... but those only last a few months to a couple years. Overall the 20's might actually return more than the last 10 years have. I'd say it's about 50-50 on that one

Wells Fargo Investment Institute, the S&P 500's cumulative total return over the decade...
1930's - 2%
1940's - 147%
1950's - 515%
1960's - 118%
1970's - 74%
1980's - 415%
1990's - 446%
2000's - (4%)
2010's - 253%

I can't go along with the idea that "since it has been good, it will be bad soon". I can't predict the future.

I use an AA that I am comfortable with. I usually have ten individual stocks that I use stops with.

 

[Montecfo]

For the whole decade, not sure. For now I am thinking we now have both the Fed and tariff trend as tailwinds that were headwinds. And stocks usually rise in an election year. Money supply growing, Inflation and unemployment low, wages rising. Lots of cash on the sidelines.

We are entering the "roaring 20s" in decent shape for equities. Having said that, I am sticking with my AA and giving my debt allocation a more quality tilt, since you never know.

 

[NW-Bound]

what's interesting is that when you look at mid decade through mid decade, the numbers seem less volatile... I'm scratching my head over that.

I don't know about earlier decades, but can offer an explanation when you split the decade of 2000-2010.

The 1st half of the decade saw the implosion of the dotcoms and the tech/internet meltdown, and also the effect of 9/11. The 2nd half of the decade got wiped out by the subprime fiasco and housing bubble burst. When both are included in the same decade, we should be amazed that the result was only so bad.

 

[NW-Bound]

I can't go along with the idea that "since it has been good, it will be bad soon". I can't predict the future...

Right.

Looking at the past, we have seen that when it was awfully good, it even got better. Conversely, when it rains it pours. Man, that hurts!

I was observing how good and bad years can come in a streak in another thread.

 

[DrRoy]

So, I understand that the human mind is rather programmed to find patterns in data/info, because it was a way to locate food and stay out of danger. That being said, we also can look at random data and find patterns that are not really there. As long as we are having fun here, I see in the decade return data a pattern of rather 1 "bad" decade followed by 2.5 "good" decades. Roughly then:

1930-1940 Bad
1940-1965 Good
1965-1975 Bad
1975-2000 Good
2000-2010 Bad
2010-2035 Good?

That would put us 10 years into the current "good" period of 25 years.

 

[RxMan]

I think eventually we’ll have a little pullback in equities which to me is healthy. It’s getting more and more difficult to find bargains to allocate capital.

 

[ATXFIRE2034]

I think a recession is likely prior to 2022. I don't believe it will last long but we could potentially see interest rates turn negative as a result. Not sure what impact this will have on markets but I predict that it could potentially accelerate the wealth inequality gap as money will be cheap and if invested properly might lead to even further disproportionate gains.

 

[SunGuy]

Crypto currency will be the highest ROI assest class by far.

 

[UnrealizedPotential]

I have no idea what this decade will bring. I am not going to get killed like what happened to me in 2008. I positioned my portfolio to withstand such a downturn, of course I gave up some growth to be able to do that. After 2008 happened, Ben Graham made a believer out of me on the 50/50 AA.

 

[Bigdawg]

Bears on average go for 13 months. They avg 22 months to recover. I have more than 36 months in MM and CD's. The rest of the stash is riding high in equities. Easy for me to take this position with 2 military pensions (me and DW) backing me up.

 

[RobbieB]

I'm not planning on changing my 80% equity allocation.

1) Interest rates suck, stock dividends pay more.
2) Stock divis and growth have funded all my expenses and my net worth still grows.
3) If interest rates go up my bond values go down.
4) I don't see any reason for a serious market downturn anytime soon.

 

[Montecfo]

Bears on average go for 13 months. They avg 22 months to recover. I have more than 36 months in MM and CD's. The rest of the stash is riding high in equities. Easy for me to take this position with 2 military pensions (me and DW) backing me up.

Well, as a guy not reliant on pensions, I think you have it right. To me, the thing to remember, bull market or bear boils down to 3 words: Stay Fully Invested.

Good words for life also!

 

[unclemick]

Portfolio 40/60 on full auto Target Retirement and age 77 this year so after my pals at the IRS take their cut of the mandatory RMD - ? a few good stocks OR party on cause you can't take it with you or so I've heard.

Decisions, decisions.

heh heh heh - Been a great run since 1993 age 50 so thinking about it won't keep me up at night. Thanks Mr B. RIP.

 

[Markola]

OP, I’m 54 and, in addition to our US stocks index funds, we are allocated:
34% US bonds
16% International bonds
14% International stocks
and our house is worth about $500k with a low fixed mortgage.

I understand you lean toward stocks at age 37. I was 100% stocks at that age. The Great Recession in my early 40s perked up my interest in bonds. I remember realizing in the depths of it, “Oh, this is why people own bonds...”. Since you’ve already discovered some bonds, my prediction for you is, as the 2020s end and you’re nearer 50 than 40, other asset classes will be more appealing. [emoji74]