Susan,
Yes, I have mentioned my very long term view, and it is pretty simple. Regardless of how high the overall market gets, I feel confident that within 5 years the P/E ratio of the S&P 500 will be back trading in the 15-20 range. I believe that right now it is trading somewhere in the 30-35 range, so that would be about a
40%-50% pullback. This is more a guess than based on anything concrete, but I feel that a susceptible time for the next bear market to start could be the 6 month period from SEPT 1999 - MAR 2000. If I am correct, what a lousey way to start the new millenium. No Im not firm about that, and Im not preparing for doomsday/etc, however I have started good conversations with my children, who are 18 & 20 years old, of what may come in their future, and as always focus on
concept of not getting tied to materialism. They grew up during a
time when it was easy to obtain materialistic matter, so adjusting to
a time when it may not be that easy may be a bit difficult. Frankly,
I have always had that belief, just more now.
The reasoning for this belief is based on my strong belief in
YING-YANG and cycles in nature, not just in money. More specificly,
I am a firm believer in the 50 year cycle, which has its roots back to
biblical times. Bad times dont last forever, since this is not HELL, and good times dont last forever, since we are not in UTOPIA. I believe that we are already near the end of the good times, in terms
of years.
I was a teenager in the early 70's and remember the tough times my family and others had. Was it unbearable, NO! - but it wasnt as easy as it is now. Some say it is very tough now, but I actually see that type of sentiment coming from greed - the more one gets, the more one
wants.
Those who are overly tied to materialism, and there are many - will
have a very tough time adjusting when a bear market starts. Frankly, I would not be surprised if suicides rose, but that would of course be the exception. Also keep in mind that the baby boomers will be starting to retire in 10-15 years. Will they be able to reach their goals/regain their losses with a possible bear market occuring near their retirement. Most of the average investors I speak to now are
planning their financial retirement goals on 15-25% gains year after year, with absolutely no calculation for a bear market. To make it
worse, some are already spending it as if they have it now.
seeya |
