Where Will the Stock Market Be a Decade From Now?

Mish

An interesting discussion took place on Twitter today regarding the stock market.

Where To?

My Guess of Hussman's Guess

Hussman Replies

-4.8% annually for 10 years.

Max drawdown -65%.

If I interpret Hussman accurately, I come up with this.

Future Value at -4.8% for 10 Years

MoneyChimp has a nice Compound Interest Rate Calculator.

It allows negative interest rates. Most don't despite the huge amount of negative-yielding bonds.

Hussman on the Fed Model

Looking Back

My Guess

I do not have a guess as to where we will be 10 years from now but I do expect something on the order of a 65% drawdown between now and then, with some sort of rebound then in play, perhaps no higher than we are now.

US Large Caps

Let's assume the GMO 7-Year Forecast is correct and someone lost 4.4% every year for seven straight years.

That is amazingly tame compared to what some of us think.

Yet, it would crucify pension plans assuming 7% annual gains.

Mike "Mish" Shedlock

Comments (22)
No. 1-8
jivefive99
jivefive99

Per Harry Dent-like thinking (and it kinda makes sense): The next couple of years is gonna be bad, however, my sister was born in 1973, the lowest number of births in a generation (3.1 million). She's 46 this year (the year Dent says is the average person's maximum spending in our lives) and 50 in 2023 (when the high earners max out their spending). If my sister is the lowest birth point for people turning 50, and births only go up from her low point in 1973/2023, I'm thinking from 2023 on Americans will spend and spend and spend (and borrow) more every year from 2023 on. The math worked for the baby boomers -- why not for busters flowing into millenials?

Realist
Realist

I don’t have an opinion on where the stock market will be in 10 years. However, I continue to expect another decade of slow economic growth (averaging 1%/year) over that time. Perhaps slow growth will reduce p/e multiples somewhat. I never worry too much about the stock market because it is never more than 30% of my total assets. Gold is never more than 5%.

Maximus_Minimus
Maximus_Minimus

It's all centrally planned and managed now.

Stock market - up (only). ✔

Inflation - 2% (until further notice). ✔

Debt - out the wazoo. ✔

Cynicism - up (and rising) ✔

Flic1
Flic1

But the real question is how many tens of trillions will the Fed print to keep this pig afloat?? Seriously...what will stop the Fed at this point?? I never thought they would be able to get much further but here we are again with "not-QE" and backdoor bailouts of a large bank and/or hedge fund(s). What a joke this has all become...

Scooot
Scooot

S&P moved the USA down one notch from AAA to AA+ some time ago. I wonder when some of the others might follow. Surly they must be thinking about it, they’re not going to look very good when the bubbles burst.

BaronAsh
BaronAsh

Quick technical check using monthly chart:

(first two tries not accepted, trying again).

Long-term Volume Profile of (higher volume) ES indicates 60% correction to around 1320.

(two trailing lines are long-term Vwaps starting at major lows).

TimeToTest
TimeToTest

Mish you are flat wrong.

The future is the fed buying everything.

The market might correct at some point but if needed the fed will quickly step in and buy until things are “fixed”.

Talk about return on your money. The fed buying 10 or 20 or 50 trillion worth of stock to prop up a 100 trillion dollar market.

Down destroys the system. Destroys the Fed. Up keeps the oil flowing. Keeps the fed.

Do you really think they are going down without a fight?

JohnH
JohnH

Please help me understand exactly why the market will ever go down with unlimited money printing and soon to come MMT?


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