The End of the Golden Era (for US Equities)?

[yakers]

Interesting article in The Economist Magazine, says essentially the 'golden age' is over for the US: "....in ten years’ time nobody will be repeating the obvious conclusion of today: that investors in equities—especially American ones—have enjoyed a golden age"
But bonds don't look so great (to me & my friend Buffet). So where to place my $ for reasonable returns?
Fortunately I'm in my senior phase (70+) and have enough but it has been heart warming to watch the portfolio grow while in the spending phase of life. Maybe no more.

 

[Chuckanut]

Interesting article in The Economist Magazine, says essentially the 'golden age' is over for the US: "....in ten years’ time nobody will be repeating the obvious conclusion of today: that investors in equities—especially American ones—have enjoyed a golden age"
But bonds don't look so great (to me & my friend Buffet). So where to place my $ for reasonable returns?
Fortunately I'm in my senior phase (70+) and have enough but it has been heart warming to watch the portfolio grow while in the spending phase of life. Maybe no more.

They’re decades late.

According to Business Week magazine the equities market died in the late 1970s.

https://ritholtz.com/1979/08/the-death-of-equities/

Only the elderly remain loyal to equities.

“At least 7 million shareholders have defected from the stock market since 1970, leaving equities more than ever the province of giant institutional investors. And now the institutions have been given the go-ahead to shift more of their money from stocks—and bonds—into other investments. If the institutions, who control the bulk of the nation’s wealth, now withdraw billions from both the stock and bond markets, the implications for the U.S. economy could not be worse. Says Robert S. Salomon Jr., a general partner in Salomon Bros.: “We are running the risk of immobilizing a substantial portion of the world’s wealth in someone’s stamp collection.”

All that money you think you made in the last few decades is just a figment of your aging imagination.

 

[audreyh1]

End of golden era articles are popular. Published often. Its always something.

 

[GrayHare]

"The End is Near." It may not be near, but someday there will be an end to the government borrowing that gooses the economy.

 

[MichaelB]

When the US trade deficit ends and the US$ is no longer the global reserve currency I’ll bet my portfolio the golden age for US equities has ended.

In the meantime, the $US and US asset markets will continue to reign supreme. In fact, the contrarian in me is asking if this isn’t a sign to reduce international equity holdings.

 

[REWahoo]

Whenever I see articles like this I immediately think of Mark Twain:

The reports of my death have been greatly exaggerated.

 

[sengsational]

When the US trade deficit ends and the US$ is no longer the global reserve currency I’ll bet my portfolio the golden age for US equities has ended.

In the meantime, the $US and US asset markets will continue to reign supreme. In fact, the contrarian in me is asking if this isn’t a sign to reduce international equity holdings.

If you believe this Peter Zeihan guy, the demographics of most developed countries are heading for inevitable Greece-style failures due to demographics. And, oh, "look at that", the US, with it's "echo" of the (very strong original) US baby boom is set to fare better that the rest. China is in horrific shape because of the one kid thing they did. I won't be around long enough, I don't suppose, but some of these things are going to hit the fan in 10 or 15 years, according to Zeihan. I heard him on Sam Harris' podcast (the first half is free).

 

[LateToFIRE]

In the media, the end is forever near! Some day they'll be right about that.

 

[Toocold]

It's either Peak Oil or To the Moon!

 

[bjorn2bwild]

The premise of the article is that equity profit growth of the past two decades (1989-2019) can be attributed entirely to the decline in interest and corporate tax rates so will be difficult to repeat. link.
Sounds reasonable, but we all know the Yogi Berra quote…..
PS - Copy and paste into archive buttons to get past the paywall.

https://www.economist.com/finance-a...oming-but-the-good-times-are-unlikely-to-last


https://www.archivebuttons.com/

 

[jebmke]

"The End is Near." It may not be near, but someday there will be an end to the government borrowing that gooses the economy.

I think there is a scene in Love and Death where Woody Allen holds up a slab of sod and says "One day I'll build on this land."

 

[Montecfo]

Maybe they meant the "golden era" for bonds. Not sure we ever made it to gold. Maybe stainless steel.

But I think equities have some room to run as rates decline, at least it seems so as of now.

 

[FREE866]

Happy to see articles like this. To me it's a bullish sign.

 

[donheff]

Thanks for all the interesting points about us vs the rest of the world. It would seem that the moral of the story is: keep the door open to immigrants and keep up government spending. If we do that the 21st century will be a platinum age.

Although maybe not if you live to close to sea level.

 

[Stormy Kromer]

Bears make noise. Bulls make money.

Long term of course.