Daneric40

Preparing for the Fall

I agree with the author in that the market has had a false bull rally coming of its earlier lows and will indeed find a new but not until later this year. My prediction has always been that it will be in November of this year, 2008. I do predict a general malaise for the next few weeks and then in July, the market will reach a new low, but this low will not be the final one. Everyone will THINK its the new low and then some money will pour into the market and we'll have a mini-bull rally from August until Octoberish.

Then a new crash will occur because by then it will be apparent that inflation, the housing depreciation and high oil prices will have dug deeper into the economy more than anyone originally thought.

And we will all know that we will be in a recession (long and nasty) that will not recover until late 2009, early 2010.

And even then P/E ratios will continue to adjust downward and commodities will continue to rise until the year 2017. That will mark the end of the bear market that started in 2000. By then P/E ratios will be much lower and American society will have changed a bit.

Now am I supposed to stay in cash until the year 2017?

Or until November 2008? Which is it because I believe what I said will pan out to be correct.

There is always a bull market even in a bear market. Even when the market crashed 400 points, there WERE gainers.

So this article is a mixed bag. Whats an investor to do? What do you do with your 401K when the crappy index funds you have available all lose money over the long term?

When the SPX is LOWER in the year 2017 than it was in the year 2000, how are you supposed to build wealth?

You become a SMARTER investor. But yeah he is probably right, a lot of people will get hurt. Keep your 401K in the "stable valur fund and get that 3-4% steady every year is the best you can hope for.