So far, investors are pulling out of their Mutual Funds and avoiding the Stock market. ! STUPID !
Risk aversion makes sense – but not after a crash. The time to be risk averse is when everything looks great and the bubble is growing. This week the DOW went below 9000 and then bounced back 200 points. Back in March 2009, the DOW fell to a low of 6626 … scary … but in terms of the time period, that was a “farmed” double bottom relative to October 2002.
REALITY – the financial people who love the GOP so much looked at at the Bush election and panicked … hence the 1999 problems. The optimists – those who believed the ride could never end and affirmed that belief by buying into the housing and debt bubbles – carried the market to its 2000 high. Thereafter the bought the bubbles and the market fell from the money being sucked out – until it hit a cyclical bottom.
We are now in a trading range … and could remain between 14000 and 8000 until 2025 – or more likely the 2028 election cycle. People who are twenty today will only be 38 and approaching their professional peak at age 40 – with 25 years left before retirement. Those who are approaching forty will be in their late fifties and on the way to final planning before retirement. At that point, the DOW will be racing, or rocketing, upwards to break 20000 and beyond. Those who wish to become VERY RICH will be investing in the stock market NOW – or, over the next six years.
IF the 2012 election evicts Obama, the market could fall below the 6000 level (but not below 5000). If GOP, whoever is elected will either be a one term President, or the President who wages the first phase of the Third World War. Remember, wars are profitable and yield boom time in their aftermath. Also, a war, which will devastate populations around the world and be heralded as the predicted apocalypse, would reverse the baby-bust and stabilize resource consumption with resource availability… more likely, there will be no “biblical apocalypse” and conflicts will be limited and truly devastating only to those stupid enough to initiate them. We can expect the Arabs, with their average IQ of 85, to be the ones who initiate the problems of the next two decades.
By 2035, Oil will cease to be king. Israel, if the current repots of oil and gas finds prove accurate, will have more than ample resources to power their military and decimate those nations which are intentionally subjugating the Palestinians and denying them productive integration and full membership in the Arab world. There is no rational reason for refugees to still exist – other than the Arab League laws which designated refugee status to the children and grandchildren of those refugees from the 1930’s (yep pre-Israel & Hitler). The Arab League is the continuation of the Nazis with who they aligned in the 1930’s and 40’s – and, as was stated during the 60’s with regard to the racists holding down the blacks, find they must must get into the mud in order to keep the Palestinians there. Given their oil resources, the Arabs should have surpassed -- in general wealth, trade and education – the accomplishments of their medieval ancestors. Unfortunately, they have become enamored with the idea of being idiots attempting to reinstate the Inquisition as an Islamic cause. !!! STUPID !!! (ok … there is clearly a competition between fundamentalists – Christian and Islamic – for how can establish their claim to the lowest levels of hell … but that’s another issue)
In any event … NOW is the time young investors should be looking for buying opportunities. Curiously, secure bond investments – held properly – could be used to leverage investment loans. Borrowed capital makes sense when the effective interest rates are at or below historic inflation rates – and can be offset by bond interest to … over the long term .. generate zero risk stock portfolios with explosive long term potential.