Vanguard expects us market slowdown

Vanguard: You’ll make a lot less money in the stock market in the next 10 years—here’s what you can do

https://www.cnbc.com/2018/07/06/vanguard-youll-make-less-mon…

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And the good news is, with interest rates on the rise, you can actually earn a decent return on that money, Boneparth says. Right now, you can earn 1.90 percent interest on $5,000 in a Sallie Mae money market account or 1.80 percent in a savings account at Marcus by Goldman Sachs…

You can earn $90! {Insert sound effect of donkey passing explosive wind here}

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In the next 10 years:

Batteries will allow grid scale storage and all electric transportation.

Vacuum tube tranport will have significant impacts on avaition.

Quantum computing will make computers that will far outstrip the best that Nvidia can dream of.

The bulk manufacturing of carbon nano tubes and other Fullerens will be in full swing.

China will be building on assembly lines Small modular reactors.

We will have achieved postive energy from fusion reactions.

The average human will he able to live to 120 if he doesn’t meet a violent end.

Education will be available from the best educators to anyone one the planet for basically nothing.

Vegetables and fruits will be grown on anyplace on the earth with energy available. This includes under the sea, underground, in the desert.

Over half the population of the planet will see their life go from the “food line” to the “airline”

Do poorly?

Maybe. The U.S. can become a failed state and it could take half a millennium for the world to recover.

But I think not.

Cheers
Qazulight

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Qazulight, ignoring how likely it is that all of those things will be achieved in the next decade, won’t some of them be deflationary? Some of them will greatly hurt the values of many companies that have substantial impacts on some of the most closely covered indices. While the “lot” of the average human on Earth will be greatly improved by many of these things, that doesn’t directly correlate with market returns. However, by being investors in individual stocks who closely follow our holdings and strive to own companies that will benefit from shifts in technologies and business models, those items could cause that much greater of a disparity between market returns and the returns of many folks on this board and the NPI board, thanks to our agility and our ability to not be invested in merely average companies or, even worse, companies that will be fully disrupted by coming advances.

volfan84
Long the future

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It may just be me, but any time any firm “expects” something to happen, I find they point to the same age-old metrics the market has had some sort of correlation with in the past.

What they often will not discuss openly is how the markets & economy have changed drastically as a result of monetary policy, globalization, the internet (and technology in general), and the rise of passive investing.

The Fed has more economists on their payroll than Vanguard, Fidelity, UBS, Goldman, and the other firms combined. Not to mention the near unlimited computer power they have, and yet, the Fed is still unable to predict market movements… not to mention if you’re a top economist, you’re not working at Vanguard…

My point being:

  1. The market has done very well since 3/2009. Anyone, and everyone, will continue to say “the returns from March ‘09 to now will not continue” and eventually they’ll be right.
  2. Market corrections happen and help longer term investors so let’s not necessarily be afraid of them.
  3. Not every company and sector are created equal and therefore will not behave the same during corrections.
  4. Take the predictions of firms with a grain of salt. Vanguard, among others, will put their opinion out there to create uncertainty in their clients’ minds & encourage them to call & speak with their advisers to then upsell them into a relationship model.
  5. Eventually we’re all wrong about a thesis or driver in the market. Know what you invest in, but also understand that you don’t always know what you don’t know.
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Qazulight, ignoring how likely it is that all of those things will be achieved in the next decade, won’t some of them be deflationary?

Most assuredly. The question that has bothered me for a long time, “Where is all the money coming from?” The U.S. economy has grown about at the rate of the population for the last generation. Yet, the stock market has gone up a lot.

Where did that money come from? Some will say it is income inequality. I would say that this is part of it, however when you look at the rise of wealth in the rest of the world, you realize that the bulk is coming from there. As long as the U.S. remians the empire of the earth, the money will flow here.

Some of them will greatly hurt the values of many companies that have substantial impacts on some of the most closely covered indices. While the “lot” of the average human on Earth will be greatly improved by many of these things, that doesn’t directly correlate with market returns. However, by being investors in individual stocks who closely follow our holdings and strive to own companies that will benefit from shifts in technologies and business models, those items could cause that much greater of a disparity between market returns and the returns of many folks on this board and the NPI board, thanks to our agility and our ability to not be invested in merely average companies or, even worse, companies that will be fully disrupted by coming advances.

volfan84,

This is almost exactly right. There is one saving grace for the indexes: They are not static. Losers get dropped, winners get added.

Cheers
Qazulight

Long the future too

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What they often will not discuss openly is how the markets & economy have changed drastically

It is never “different this time”…

My point being:
1. The market has done very well since 3/2009. Anyone, and everyone, will continue to say “the returns from March ‘09 to now will not continue” and eventually they’ll be right.
2. Market corrections happen and help longer term investors so let’s not necessarily be afraid of them.
3. Not every company and sector are created equal and therefore will not behave the same during corrections.
4. Take the predictions of firms with a grain of salt. Vanguard, among others, will put their opinion out there to create uncertainty in their clients’ minds & encourage them to call & speak with their advisers to then upsell them into a relationship model.
5. Eventually we’re all wrong about a thesis or driver in the market. Know what you invest in, but also understand that you don’t always know what you don’t know.

You forgot point number
6. Bear Markets always happen - there will be another recession and the next bear market is likely to have a bigger impact on stocks that trade primarily on momentum rather than earnings.

tecmo

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