decoflair

First Call of a Double-Dip Recession: Setting Up a Market Bottom?

Since 1974 I have been a student and investor of the stock and bond markets -watching the gyrations along the way. The DOW index hit the high $500s back in the mid 1970s (yes, the high 500 mark-not 5000). Later, in the 1980s the government 30 year bond yield hit 15% as the Federal Reserve worked at ringing out inflation from our economy.
Over the past few decades millions of Baby Boomers (like myself) entered the stock market and regularly invested our excessed dollars into our 401Ks. 403Bs, IRAs, and so forth. Along the way, I had ammassed a small amount of money through the market to help supplement my retirement income when that stage of life began. Unfortunately, I and many others like myself, have witnessed the loss of most of what was accumulated in stocks over the past four decades. Once in 2000 and again at the end of 2008. Realize, that the rise in the stock market over the past four decades was a direct result of the Baby Boom generation.
Do you think at 60 years old that we Baby Boomers are going to continue investing in stocks for 10-15 years accumulating a small sum
to help at retirement time only to watch the portfolio disintegrate in 10-15 weeks?
Many Baby Boomers no longer have the long term horizon needed to build up a healthy stock portfolio. No, we are done. My fellow Baby Boomers have pulled their funds away from stocks and do not plan to return.
So, the real question to ask ourselves is what type of long term return will the stock market offer if the great number of stock market investors of the Baby Boom generation stops investing in the stock market?
Yes, there will be rallies. However, we could be entering a long period in which the market meanders and may not see new highs for a few decades. We Boomers helped to create the great bull markets we have witnessed since the August 1982 DOW low of 782 and without our dollars remaining invested or moving into stocks it could be many decades before we see 20,000 on the DOW.

Is It Time to Buy? What History Shows

1) I am not a technician or expert. However, large corporations are only beginning to announce lower revenue and earnings as we write. We are only beginning this bear market.
2) In addition, don't we need to retest the 7500-7600 level on the DOW that occurred on Nov. 21. No, it just cannot be as easy as you have described.
3) There may be substantial tax changes coming next year. History has demonstrated that major tax changes upset the market due to the uncertainty of the effects of the changes.