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Many of the 50-60 folks who are coming into retirement have had most of
their savings chewed up by this bear market and they won't give up trying
to get it back. For a 30 year old, bonds could be a viable solution
but when you have 5 years left to work and your retirement has gone from
$500K to $50K, you will try to get it back and there are two legal means
to do that. The markets and Vegas. Add to this the current
interest rate returns and people are faced with less income than the real
inflation rate. The excesses of the 90's are being wrung out but it
isn't a fast process and it most certainly isn't a painless
process. With each passing week, I see more and more truly good
values in the equity market but I still see many others which are priced
far beyond any reasonable common sense. All is doom and gloom now
.. people are simply sick of the stock market. Shorters are
thinking it can't end and fear is rampant. Not saying we are at a
bottom but the signals are beginning to light up.
Good trading,
Bob
At 12:51 PM 7/13/2002 +1000, you wrote:
What about the ageing population?
In my mind this is what is going to keep the stock market down for
years.
Bonds , Annuity income and low risk returns will be king. Risk aversion
and wealth protection are the key, not
wealth creation , particularly when we talk about the masses.
Infernal Elk wrote:
john, if you look at the major averages since march 2000, you
might
say that we've ALREADY been in a bear market for at least 2 years.
so
the low end of the duration you cite (9 months) is already out of the
question.
apart from reciting a bunch of statistics, what are you saying here?
what "odds" are you referring to? what period(s) are you
comparing
against?
- *lk
I can not comment on the DJIA forecast but I do know this:
6/3/92 to 6/3/02
DJIA went from 3,406.99 to 9,709.79 or up 185% annualized at
11.04%
Nas went from 589.93 to 1,562.56 or up 164.8% annualized at
10.23%
S&P 500 went from 414.59 to 1040.68 or up 151.01%
annualized at 9.64%
Wilshire 500 went from 4,024.34 to 9,865.09 or up 145.14%
annualized
at 9.38%
Inflation [CPI] went from 140.20 to 179.80 or up 28.25%
annualized at
2.52%
It is entirely within some realm of possibility that the worst
case
scenario on the DJIA may play out but one must look at the odds.
>From
studies I recall major bear markets can last up to 17 years and we
have not had too many of those. Most recent bear markets have been
of
shorter duration as low as 9 months to 3 years.
When pessimism is that great it is an extreme. There are 3
things I
have learned that I think apply here.
1. Do not fight the Fed
2. Do not fight the trend
3. Beware the crowd at extremes.
I give credit to Wachovia for the bulk of this info.
Sincerely,
John
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