Posted on 10/18/2009 4:13:23 AM PDT by Scanian
US workers, their retirement funds already clobbered by a decade-long flat-lining of the major stock market indexes, are facing the growing odds of another Lost Decade -- which would further tarnish their dreams of prosperous retirement.
A number of financial pros are predicting just such a nightmare -- that the Dow Jones industrial average and the S&P 500 Index, into which many workers have invested their 401(k) cash, will march sideways for as many as another 10 years.
"The country will grow at a slower rate over the next 10 years as Americans begin the long process of de-leveraging," said money manager Vitaliy Katsenelson, who has studied the Dow's performance over the past 100 years. "That will produce lower corporate profits which will keep markets at bay."
(Excerpt) Read more at nypost.com ...
“The country will grow at a slower rate over the next 10 years as Americans begin the long process of de-leveraging”
How can Americans begin to really de-leverage when our government is putting us in to debt faster than any of us can climb out of it?
I want to know what people are “investing” in that has made the market grow to 10K? Is it all short term? I can’t possibly see where they think the future looks like a winner.
It is unfortunately a positive feedback mechanism.
Once money starts flowing in a particular direction, be it the Dotcom bubble, the housing bubble, the commodity bubble, whatever, it creates its own demand. Or in other words, once the swarm goes into a particular area it starts consuming available supply causing prices to rise and when the prices rise every says “look at the great returns I'm getting” and more follow... All built on a market based Ponzi scheme with no one in charge or control...
I have no idea how to fix it but you can see the cycle repeat over and over again...
"The only exception" could occur again...
The financials took at dreadful beating (deservedly so) in last year’s crash. Shares of stock in Wells Fargo, BOA, Citigroup, JPM, GSachs, etc. which were once trading at more than $50/share dipped to less than $5/share in some cases.
When they were bailed out, investors saw the chance to get incredible bargains, knowing Uncle Sam was backing up their investment, because the banks were too big to fail.
That’s a big part of what has driven the rally.
Another part is that despite high unemployment, most economists think the worst is behind us. So people are trading on optimism.
It’s said that the market trades about 6-9 months ahead of the economy, but I still think this is extremely irrational.
On the other hand, in 1999, the DJIA was 10,000 and today it’s 10,000. So, on average, if you’ve had your money invested in stocks for the past 10 years, without touching it, other than dividends, you’re pretty much back where you started. Disclaimer: Some individual stocks have done quite well during that time, but overall - the same.
I’d just be happy to find something I could put my money in that was safe and would return 3-4% at this point.
A number of financial pros are predicting just such a nightmare -- that the Dow Jones industrial average and the S&P 500 Index, into which many workers have invested their 401(k) cash, will march sideways for as many as another 10 years.
They think "sideways" is a "nightmare"????
I think they're still being overly optimistic.
Don't they know that 95% of Obama's "stimulus" will drag us to our doom?
The only thing that has a snowball's chance of helping are the infrastructure projects... and even then you have to carefully pick-and-choose the good from the bad.
bump
You can, but you have to lock it in for 5 years..
You can't make any money right now from a savings or money market account, so the greedy people are investing in the market trying to increase their returns. This is driving up the market artificially. BUT, as soon as the fed is forced to raise interest rates to stop hyper inflation... THEN money will come rushing out of the market and it will crater.
Yes, I know. But I'd like something short term. Interest rates won't stay this low forever and I don't want to be sitting in something returning 3-4% when prevailing rates might be several % higher.
We had hoped to retire in 3 years, but the "new world order" has dashed that dream to smithereens.
There are minimum holding requirements, but when we look at our portfolio, they beat the hell out of our mutual funds over the same timeframe.
Bond funds will do that, but if you buy now there is risk that your principle will take a hit. VBMFX has had 10% swings over the last decade and it is near the high now..
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