Prospects for equities over next decade

[escobar]

http://globaleconomicanalysis.blogspot.com/2011/08/another-lost-decade-coming-up-boomer.html

Good article discussing possible returns for the stock mkt over next decade. Seems consistent with maloney's view that stocks are still overvalued and then will overshoot to the downside. Let's hope in ten yrs we can sell our gold and silver and buy some great co's at crazy bargains or buy bonds at 15% yields.

Seems like based on what I have researched; bonds are not good now, stocks better than bonds but the overall mkt is not cheap and is likely to experience multiple contraction over next decade as boomers retire and the world delevers. So seems like we hang out in pms until the next bull cycle in stocks or bonds shows up.

I guess some pts in history you just need to be patient and wait til the aces show up.

 

[swissaustrian]

That's a great article. Thanks.
One thing I'd like to add:
I don't expect equity prices to fall a lot in nominal terms, although I expect that their valuations will fall further. How can that be possible? Look at the 1970s...
Valuations went down, prices stayed basicly flat (with huge volatility) for a decade, but inflation boosted earnings in nominal terms.

 

[escobar]

Yeah I agree. I have heard various Keynsian economists, who i am sure think very similar to our Fed officials that they cannot let the DOW go below 10k. So they will inflate away until we maintain that level. Because they know joe public does not really understand real returns but only nominal. So as long as they can keep people thinking, 'oh i havnt lost any money' then people will somewhat more confident in the current system in which they are getting robbed blind every day.

 

[swissaustrian]

The other side of the coin is that the dow-gold ratio will probably reach 1 over the years

 

[DSAbug]

The next bull market in bonds will be LONG after the commodities bull ends. Most likely, the next bull market will be in stocks believe it or not...