secular bear market

[NYCGuy]

I gather from a recent discussion that the notion that the stock market is currently in a secular bear market is an unfamiliar one. This article for financial planners presents the case:
http://tinyurl.com/ojkmj

 

[yakers]

Interesting article. The Fed Model is fairly popular right now and that would indicate that stocks are not overvalued right now. I am not sure if we are in some kind of bear market right now but as I am still in the accumulation phase I am not as concerned as if I were in the withdrawal phase. I would rather get into and start out of a recession before I retire in the next year or two.

 

[sgeeeee]

Seems like pretty faulty logic to me.

1) If we manipulate the stock market data in a certain way, we might assume that we are in a secular bear market.

2) If we are in a secular bear market, the market will provide below average performance for some time.

3) We don't know how much below average or how long, but it could be a lot for a long time -- or maybe not.

4) Indexing will only provide market returns.

5) So you should use active management.

Notice how point 5 has nothing to do with the first 4 points.

I wonder what their motives are? :

 

[brewer12345]

Seems like pretty faulty logic to me. 

1) If we manipulate the stock market data in a certain way, we might assume that we are in a secular bear market.

2) If we are in a secular bear market, the market will provide below average performance for some time.

3) We don't know how much below average or how long, but it could be a lot for a long time -- or maybe not.

4) Indexing will only provide market returns.

5) So you should use active management.

Notice how point 5 has nothing to do with the first 4 points.

I wonder what their motives are?   :

I think they got their "logic" from hosuc.

 

[riskadverse]

by Kenneth R. Solow, CFP®, CLU, ChFC, and Michael E. Kitces, MSFS, CFP®, CLU, ChFC, REBC, RHU, CASL

While I thought we were in a secular bear market, after seeing who agrees with me, I'm reevaluating my position.

 

[brewer12345]

by Kenneth R. Solow, CFP®, CLU, ChFC, and Michael E. Kitces, MSFS, CFP®, CLU, ChFC, REBC, RHU, CASL

While I thought we were in a secular bear market, after seeing who agrees with me, I'm reevaluating my position. 

Jeez, I thought I knew a lot of the acronyms, but these guys have a whole unfamiliar alphabet soup! Lets see:

CFP = Certified Financial Planner
CLU = Chartered Life Underwriter
ChFC = Chartered Financial Consultant

No clue what the others are.

 

[cute fuzzy bunny]

Nobody knows and systems that backtest to fit history 9 out of 15 times or 15 out of 9 times arent worth the paper they're printed on.

Good planning and asset allocation, stay the course, dont freak out, and dont try to time the market or guess whats going to happen.

If you're spending your life paranoid about what might happen, its a life wasted.

Cute n' Fuzzy Bunny, BSA, FBI, CS, LE, FOS, YNGT

 

[justin]

CASL is our local youth soccer league (Capital area soccer league). Not sure what that has to do with financial planning.

 

[brewer12345]

Cute n' Fuzzy Bunny, BSA, FBI, CS, LE, FOS, YNGT

Hmmm, lemme try:

BSA = Bull Sh!tters' Anonymous
FBI = Fcuking Big Idiot or Fan Belt Inspector
CS = Crumb Sniffer
LE = Little Egg
FOS = Full Of Spam (well, you know...)
YNGT = You'll Never Get Tired

 

[cute fuzzy bunny]

You only got near on the FOS...close on the BSA.

Shoot...now I forget what LE was for... oh yeah...now I remember...

 

[NYCGuy]

The Fed Model is fairly popular right now and that would indicate that stocks are not overvalued right now.

As perhaps you know, there has been a lot of criticism of the "Fed Model", i.e. what we think Greenspan was thinking. For example, Asness found it to be a poor predictor or long-term returns (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=381480).

I found the other responses to be disappointing in quality. I was hoping for more thoughtful rebuttals. Sorry if I overestimated the crowd here.

 

[sgeeeee]

. . . Sorry if I overestimated the crowd here.

That's okay. We've been overestimated by far more sophisticated investors than you.

 

[Nords]

I found the other responses to be disappointing in quality.  I was hoping for more thoughtful rebuttals.  Sorry if I overestimated the crowd here.

Does the quality of the responses depend on the degree to which they agree with your post?

First you insult the quality of the responses, then you dangle a word with the syllable "butt" in it like a dead chicken over a pond full of crocodiles.  I don't see you doing much to raise the overall average of the quality of your responses, either!

Maybe you need to spend more time over at Greaney's board. 

 

[wildcat]

From the article

"The key point of this article is that relying solely on a passive strategic portfolio designed to produce near-benchmark returns in a secular bear market will do nothing but guarantee that clients will underperform long-term expectations for an extended period of time and make it likely that they will fail to achieve their financial planning goals."

How would your chances be any better with any of those strategies? The 'concetrated portfolio' theory may be the only one I would give any weight to out all the ones listed.

 

[cute fuzzy bunny]

I would have deep concerns about the reliability of any material written by someone named "Asness". Is that a name or a title, as in "Yes, Your Asness".

I have a thoughtful rebuttal. Two words. Four letters in the first word. Three letters in the second word. You pick.

I'm gravely disappointed that nobody wanted to try to decipher my qualifications. Lets see if I can remember them.

BSA = Bullshit artist
FBI = female body inspector
CS = cub scout
LE = liar extraordinaire
FOS = full of ****
YNGT = you'll never get this

 

[REWahoo]

BSA = Bull**** artist
FBI = female body inspector
CS = cub scout
LE = liar extraordinaire
FOS = full of ****
YNGT = you'll never get this

I found your qualifications to be disappointing in quality. I was hoping for more thoughtful acronyms. Sorry if I overestimated your capabilites here.

 

[cute fuzzy bunny]

The wife was holding the baby and tapping her foot as we were supposed to be out the door to look at tile samples. Best I could do under duress and with 15 seconds to come up with something.

Tell you what, i'll take 20% off your bill for the nuisance. Will that be cash or charge?

 

[maddythebeagle]

15 secs. is good. I think there is a guarantee....derail a ridiculous or a troll thread in 30 sec. or less or the next pithy retort is free of beaver or booby references.

 

[modhatter]

I don't see the need for the degrading "tone" here.  I think NYGuy posted a most interesting article for you to read, that merited some serious discussion, and not the dribble that was posted.  

Not that I am in any way opposed to humour, but I saw no humour in the responces anyway.  Perhaps, the article has some very good advise and is correct in it's assumptions.  Those who refuse to even "consider" it's merit, may live to regret it.

 

[Ed_The_Gypsy]

a pond full of crocodiles

Nords, that is a pretty good description of this board, for my money.

Ed The Troll
Who almost behaved himself today.

 

[sgeeeee]

I don't see the need for the degrading "tone" here.  I think NYGuy posted a most interesting article for you to read, that merited some serious discussion, and not the dribble that was posted.  

My first post was serious. I happen to think the article is bunk. I explained why. If NYGuy did not understand or disagreed with my analysis, he could have asked for clarification or offered an alternative point of view. He chose instead to make condescending remarks about the posters on this board. That approach is not likely to produce more discussion.

There are plenty of regular posters on this board capable of discussing "secular bear" articles at any level Mr. NYGuy is capable of participating in. But if he wants all of us to be awed by the fact that he posted a link to an article that is long on arm waving and short on logic, well . . . he came to the wrong board.

 

[REWahoo]

CFB, guess you didn't note the similarity in the two quotes below:

I found the other responses to be disappointing in quality. I was hoping for more thoughtful rebuttals. Sorry if I overestimated the crowd here.

I found your qualifications to be disappointing in quality. I was hoping for more thoughtful acronyms. Sorry if I overestimated your capabilites here.

My post was supposed to be Justinism sarcasm...

 

[riskadverse]

Please excuse my earlier response.  I have a high aversion to financial planners and the certifications they display to confirm their legitimacy.   I've read the article a little closer this time . . . which was not easy to do, and here is what I got out of it:

1.  We MIGHT be in a secular bear market.  (I actually hope this is true, but that is just for selfish reasons).  

2.  Indexing cause negative returns in a bear market.

3.  Active management by good managers will be a good way to return clients better than negative returns .


I don't find the article very enlightening.  Point 1 and 2 are obvious.  Point 3 is a crap shoot.   No one can identify the future good active managers.  If they could, finacial planners would be giving out guarantees.    

 

[tryan]

Forgetting the article for a moment ... I dare say we are in a secular bear market and a cyclical bull (of late).  It'll last a long time (10-20 years) and 5 have past.

What I am doing about it ... nothing.

 

[Sue]

The Journal of Financial Planning is a reputable publication.  This article was not written by some doom-and-gloomer/wack-job who just happens to have their own Website.  I agree with Modhatter that the article makes some interesting points which retirees (especially early ones) need to consider. 

I also think a lot of the posted comments in this thread are childish and do not address the important issues raised in this article.  NYCGuy deserves credit for his post.