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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: John Dally who wrote (3059)	4/7/2001 1:09:04 PM
From: Robert Douglas	Read Replies (1) \| Respond to of 3536

What does a "50 year average growth rate" have to do with the next 12 months? If your time horizon is only twelve months you have no business being in equities. Now 50 years is a unrealistically long time horizon, but most every 20 year period exhibits similar results. For a person with a 20 yr. horizon, equities should play a significant role in their portfolio. My estimate for earnings growth for the next 20 years is 6-7%. What is yours? If it is 4% or less, you should stick to other investments. The value of an equity is not determined by what earnings are for the next 12 months. It is determined by the future earnings stream discounted back to the present. If you are focused on the next 12 months only, you are involved in market timing and not investment, in which case you have better odds in a casino.