Fri 15 Feb 2008
2008 Will Be The Year We Should’ve All Gotten Out of The Market
Posted by RichSlick under Financial Safety
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With Ben Bernake now stating the economy is worsening and Paulson saying, “We’re at the beginning” of the subprime foreclosure mess, gold nearing $1000/oz, banks on the verge of insolvency, municipal bonds trashed, and 80 million boomers getting ready to go on the dole I’ve reached an epiphany: 2008 is the year everyone should get out of the stock market and move to cash.
I don’t know how else to quantify or qualify my statement but just if you keep up with financial news from around the world, it really makes you wonder if this is the end of the great American empire as we have known it.
I’m expected to travel to the far east sometime later this year and I already have a feeling that the sun is truly rising on a new empire over there. Our company is planning on opening three new offices in the far east and business there is booming contrast with everyone concerned about consumer spending slowing down here.
It’s quite a dichotomy of winners and losers as I’ve traveled to Europe and Africa recently and South America and Latin America last year, I get a sense for where business tides are rising and where they’re waning.
When I hear the same old tired rhetoric coming from Hillary Clinton and John McCain and the gloom and doom from administration officials, I get the sense that we’re really all doomed. I get good vibes from hearing Obama speak and despite being a Ron Paul supporter, I hope he wins the nomination. If he wins, I’ll likely vote for him as I seriously don’t want to see an old coot like McCain in office but if it’s Hillary as the nominee then I’m voting for McCain.
I’ll be doing some domestic travel this weekend so have a great weekend.
6 Responses to “ 2008 Will Be The Year We Should’ve All Gotten Out of The Market ”
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October 9th, 2008 at 8:00 am[...] new here, you may want to subscribe to my RSS feed. Back in February of this year, I wrote this post entitled, “2008 Will Be The Year We Should’ve All Gotten Out of the Market” and I [...]
February 15th, 2008 at 6:56 pm
I’m sorry but I hear a chicken little.
Since 1945, none of the 11 recorded recessions lasted longer than 16 months and none since 1982 lasted longer than 8.
When there is blood on wall street I’ll be there buying up all of the bargains.
Be fearful when others are greedy and greedy when others are fearful.
February 15th, 2008 at 8:39 pm
Someone always drags out statistics from xx number of years ago and points out that x returns y over z and that’s good enough…blah…blah..blah
I rarely see anyone point out that NEVER in the history of the US have 80 million 65+ year old people retired from the work force with expectations of getting government checks.
I never see anyone point out how the stock market returned 0% from 1960’s thru 80’s. What if history repeats itself and 2008 thru 2028 returns are flat years?
If you have a 40 year retirement horizon, you’ll probably be ok; if you have 30 years, less so; and 20 or less years and you’re in deep trouble in my opinion.
Since I hope to retire from drudgery in the next 10 to 15 years, I fall into the chicken little camp - I’d rather be safe than sorry.
My biggest fear is that boomers will catch on and decide, “I’m not taking the chance, I’m pulling my money out.” A giant sucking sound will be heard as the cash gets sucked out of the stock market and the last one out is left holding the bag.
February 16th, 2008 at 1:31 am
For everyone who takes the market falls as buying opportunities, there will be someone else saying that this time it is different.
We went through the Asian Financial Crisis about 10 years ago. Then too, I remember being told that the end of the world as we knew it was near. Stocks will be worth nothing.
I am no expert at predicting how the recent market movements will pan out, but I am betting that there will be a world as we know it.
February 16th, 2008 at 8:31 am
I don’t think baby boomers retiring really affects the market that much.
Its not like there are 80 million Americans retiring with $300k that they are going to start draining out of the market. There is a small percent that are completely loaded. There are a ton (prolly 60% or more) that have no where near enough saved. They will draw on whats left of pensions, social security and a small ammount of other savings.
Then of course, there will be people in the middle that draw a lot from 401k plans and IRAs.
The market will probably make some strange moves up and down in 2008, but will mroe likely than not end up higher than ist started.
If you really believe this, why don’t we see you mentionning making huge investments in funds like the Prudent Bear?
February 16th, 2008 at 5:31 pm
The question you have to ask yourself is if you would you put your social security check in the stock market?
If you were 65 and hadn’t saved enough, would you continue to work? If so, would you put 10% into your 401k at age 65 and hope for great returns over the next 5 years?
Please, please, please stop and think the whole thing through regarding the boomers.
Boomers are going to do one of two things:
They will continue to work because they have to in which case they’ll need every penny they earn or they will retire and pull money out of the market to live on. In either event, I don’t see how they’ll keep their money in the market. There is simply too much risk and too little reward. Earning 10% “traditional” returns when you’re retiring at 65 simply isn’t worth it.
Fathersez, no one is arguing the end of the world here, I’m just pointing out the market may be flat for the next 20 years just like it happened in Japan in the 80s till now and just like it happened in the US from the 60s to the 80s. The world doesn’t end, returns are just crappy and the inevitable, “Where can I make better return” question arises.
I’m pointing out that we have “the perfect storm” of thing wrecking havoc on the markets: subprime mess, boomers retiring, weak dollar, huge deficits, possible domestic terrorism, etc.