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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 684.83+0.6%Dec 22 4:00 PM EST

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To: Stephen M. DeMoss who wrote (51385)5/20/2000 5:58:00 PM
From: KyrosL  Read Replies (2) of 99985
 
Steve,

don't extrapolate your situation to the population at large. The "new money" created by the booming economy is being spent.

- The savings rate in the US is near all time lows. People are spending like there is no tomorrow. The trade deficit, running at a $360 billion annual rate is indicative of this.

- Average household debt as a percent of disposable income is at all time highs, having exceeded the 100% mark recently.

- Stocks are high because people and institutions continue allocating the lion's share of investment funds to stocks, to the exclusion of alternative investments. The relative value of stocks in individual and institutional portfolios is at all time highs.

Meanwhile ...

- High grade municipal bonds yield 6%, which is equivalent to a 10% taxable return.

- High grade corporate bonds yield near 9%

- Risk free 2-year treasury notes are nearing 7%.

- Even money market funds yield over 6%

Seems to me there are plenty of places you can put your money, where you don't have to wait for decades to see actual returns.
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