Dow Headed To 40,000

myself | 11/5/2021 | Setter

[setter]

I remember when it crashed down into the 7000's back in 2009 the pundits swore it would take 30 years to get back to it's 2008 level because massive amounts of people got burnt and they would never get back into the market.

So much for that.

[Magnum44]

Gold sellers always buy below spot and sell above spot. Brokers never lose.

[Gay State Conservative]

Tulip bulbs

[xzins]

Does a blue chip increase with i flation?

[Romulus]

Uh, no. The Dow was going nowhere until the summer of 82 (or was it 83?) Then it took off like a rocket. During the Carter years, the PE ratios of blue chip stocks were insanely low.

[Bshaw]

” What are your predictions? I do not know what to think anymore. Market always does well when dems are in power. I think we will have a 2000-3000 correction this year then 40,000 by end of 2022.”

While we are WAY past due for a market correction, the absolute shellacking the democrats took this week, and the apparent hard stop on Biden’s agenda may keep the market on an upward trend.

The market does well when there is political gridlock.

Where else are you going to invest?

[SamAdams76]

Exactly right. The Dow did quite well under the hyperinflation and unemployment of the Jimbo Carter administration. You can look it up.

I just did.

Dow Jones average was 975.20 in 1976.
In 1980 the Dow Jones average was 963.99

I'm not impressed.

[qwerty1234]

>> It only looks overpriced in US dollars.

Which is exactly what most people pay with.

[Flick Lives]

The problems with selling: taxable capital gains and where to put the proceeds. Cash is trash at the moment, as inflation means real interest rates negative. And real estate? Also in ridiculous bubble territory.

—

The perfect bubble; now “infecting” all assets.

[Vigilanteman]

It was in the crapper first two years of the Carter Administration (1977-1978) when it was down 20.5%. It recovered quite nicely in the next two years (1979-1980) when it gained 19%.

You can look it up here.

The point I was trying to make is not that the economy did well under Carter, of course it did not. The Dow got pulled along for the inflationary ride just as is happening now. Look at the chart.

A rising Dow is not necessarily an indicator of presidential popularity. It was up 15% in 1980 and Carter lost in a 44 state landslide. It was down 4% in 1984 and Reagan got re-elected in a 49 state landslide.

[Mr. Jeeves]

I can't imagine anyone would believe this to be the case when you have had eviction moratoriums in place for various lengths of time at the Federal and state levels going back more than a year and a half now.

All of our tenants paid all of their rent on time, for one simple reason - they value their credit and didn't want to take any chances. The eviction moratoriums primarily impacted lower-income housing, which we do not invest in - and the tax benefits and (currently) minuscule interest rates mean you are basically getting paid by the banks to buy rental property, once inflation is factored in.

Construction came to a dead stop after 2008 and was very slow to start up again, especially in middle-income housing. The US is now close to 5 million homes short of what is needed to meet demand. The rental demand for quality properties remains virtually insatiable. Buying and holding rental property right now is still the best game in town.

Biden's handlers could try to destroy all of that, of course, but real estate investors have shown historically that they have the King's Ear and have always managed to get exempted from the whatever Marxist Miracle of the Month Democrats are currently pushing.

[Lurkinanloomin]

It’s completely unhinged from reality, so who knows what will happen.

[SamAdams76]

I never tied the stock market to presidential popularity. There are other forces at work besides who sits in the White House!

I happen to be very bullish on the stock market because we are in a time of great innovation.

[grobdriver]

your allocation between stocks and safer funds changes as you approach your target retirement age

So you reach your target retirement age and the "safe" funds are all (presumably) bonds.

Except your safe bonds are getting killed by inflation.

What now?

[Romulus]

Yeah, I think everybody understands that the stock market fluctuates. But for the Carter years as a whole, the Dow was -4%. That is a poor showing and there’s no way to sugarcoat it.

[Repeal The 17th]

Congratulations, and good for you.
We all play the hands we are dealt.
Not all of them are good hands.

[logi_cal869]

Prediction:

This market is part of the plan to ‘reset’ America.

You won’t recognize it afterwards.

[Vigilanteman]

The worst year, by far, was 1977 when he could and did blame it on his predecessor. The last two years (1979-1980) were both up, 1980 dramatically so.

Not because of any great thing that Carter did, but mostly because returns elsewhere were so poor that money flooded into the market. 2021 is deja vu all over again.

[untenured]

Yep. With the exception that I handed off the responsibility for choosing investment vehicles to someone else, I’m the same — started early, and never really panicked. (Last year in April or May, being 57, I thought about getting out after seeing the market get hammered day after day during the unprecedented situation, but didn’t. Thank goodness..)

Start young, save the max with respect to employer matching, and don’t pretend you can outfox the market. When you hit retirement, that’s the best way to be in good shape.

[SamAdams76]

Well, I’m sure I’ll find a way.

[Vigilanteman]

We are in a time of great innovation. Even with technical analysis, you don't see a lot of stocks with abnormally unrealistic P/E ratios and the like.

I'm into a lot of equities myself and I'm 66. The book says I should be about 70% bonds and annuities and 30% equities. The reality is near the reverse of that.

However, I also understand that inflation and lack of decent returns elsewhere is also a big factor in why the Dow keeps setting new records.