<p>The first link in this post has a variety of charts.</p>
<p>I get my links either when I stumble on them in my readings, or somebody sends me a link, or I google them. :)</p>
<p>Historically, a large part of the stock market’s gains are dividends. I posted the div yield chart because div yields are pretty low. That probably increases the chances that future returns will not be as high as histroical averages.</p>
<p>Perhaps the pros are pushing the market up, with the belief of Fed and ECB action, so as to draw more players into the casino at Wall Street…Then they can pull the rug out from under the retail players AGAIN…without new players, the game can’t continue ;)</p>
<p>"That probably increases the chances that future returns will not be as high as histroical averages. "</p>
<p>perhaps, but if I draw a best fit line through that dividend yield data, its been sloping down for years and will continue down even though there have been years of outsized gains in the market. I expect that with the nature of companies over time having changed ie technology etc which typically don’t have as high of dividends, your supposition of reduced returns may not be the case.</p>
<p>I like the above chart. There is a book called the Outliers that mentions when you are born is very important to your success. </p>
<p>The return of the stock market is not steady. The stock market has periods of stagnation and periods of rising prices. In the past, if you were born at certain times you might see decades of very little price appreciation. Other times, decades of large price appreciation. It is easier to make money during periods of large price appreciation.</p>
<p>If an investor started in 1980, the wind was at his/her back. It is similar to having the wind at hour back when you are running a 100 metter race. Kind of helps run faster. Easier to make money in the stock market.</p>
<p>An investor started investing in stocks in 1999, the wind, so far, is in hour face. Could be like that for decades. Maybe not. Nobody knows. </p>
<p>Well, the wind at your back was simply the baby boom entering the stock market en masse…the wind in your face is the lack of participants in the market, with the overhang of the baby boom getting ready to sell some of it sholdings to retire…</p>
<p>Unfortunately for many of us, the period from 1999 to the present is when we had the most to lose. It is easier to recover if you lose 50% of a little vs 50% of significant assets. Going forward, I expect in the next few years a big downturn in the market and then outsized gains.</p>
<p>Yes. The performance of stocks from 1999 to the present has hurt the baby boomers big time. The 80’s and 90’s were quite good for baby boomers though.</p>
<p>I see where you are going comparing tech stocks to cyclical stocks…but, many tech stocks become obsolete before they can even become cyclical. ;)</p>
<p>Interest rates have gone down for 30 years and that has been a huge wind at the back of investors. HUGE. I would write the word HUGE bigger if I knew how.
Investors thought they were faster runners than they really were. </p>
<p>I don’t know what is going to happen when rates go up, and they will someday. I don’t know, maybe we will be gumming our food by then.</p>
<p>If rates go up because of robust growth…investors may be ok.
A combination of growth and interest rate decreases is better for returns though.</p>
<p>Not sure if rates will ever go back to a significant level…they have been saying that for decades…my 1 st mortgage rate in the 80’s was around 14%,i refi’d to 12%, and thought i hit the lotto…traded out of that house to new home at 9%, and it has continued to decline…we refi’d several times in the last house, and have refi’d three times already in this house in 6 years…</p>
<p>They may even hit double digits in 5 years, but it will be because the dollar followed the Euro into the foxhole, and our economy will resemble Greece’s…Not saying this is likley, but if it were to happen ,interest rates on my mortgage might not be a sole concern of mine</p>
<p>All of the stuff that I’m reading on forecasts for tomorrow is that the Fed is going to keep interest rates low for another six months. Duh.</p>
<p>AAPL and GOOG up premarket. AAPL ramp is the iPhone 5/iPad Mini, iPad Nano launch September 12. Not sure about GOOG. AMZN looks okay right now too - I’m out of that one. I am considering dumping all tech but AAPL and writing CCs on AAPL today. Then see what happens on Friday with the employment report.</p>
<p>I do not have a good feel for the report. There have been a few mass layoffs announced (banks, Cisco, etc.) but my view in NH is that things are pretty good. I should, of course, discount the parochial view - it’s just sometimes hard to do that.</p>
<p>The $compq chart is interesting. We have a spike down, a spike up, a spike down, a spike up, a spike down and a spike up. We are currently around the area of the peaks of the spikes up. If one followed the pattern, we should have a sharp spike down here to go back to the lows of the down spikes.</p>
<p>I used to cut the length, no longer…money is too cheap, and with 2 full pays at private colleges, another at a private elementary, cash flow is king…P &I is 1/8 of take home</p>
