Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
FYI: Savita Subramanian, head of U.S. equity strategy and U.S. quantitative strategy, has forecast that the Standard & Poor's 500-stock index will reach 2,200 in 2016. She also included a target of 3,500 by the year 2025. As of now, the index is hovering a little below 2,100. That would be a 6.73% gain per year, which is very atainable. Regards, Ted http://www.bloomberg.com/news/articles/2015-11-24/bank-of-america-the-s-p-500-is-going-to-hit-3-500-by-the-year-2025
Punching the numbers into a spreadsheet, I get a 5.3% annual price increase (assuming 3500 is reached by EOY in 2025.
That's not a stretch. -- In fact, its fairly conservative and may reflect secular headwinds of aging demographics and normalization (to some degree) of interest rates.
OTOH, 2025 is 10 years away. The odds of a nice, smooth 5.3% each year are so infinitesimal as to not even to be considered a possibility. Wherever we wind up 10 years hence, it won't be a smooth ride.
Observation: we are now in the midst of the 7th year of the current Bull. We are overdue for a Bear. And Bear events tend to correlate at/near Presidential handoffs.
And we are shorting the products we are selling to our clients. And no, we are not obligated to tell our clients we are betting against what we are selling them. And yes, we are subverting "risk management" to speculate against the products knowing full well if we screw up, the government will come bail us out like they have in perpetuity.
If we take 2092 as "a little below 2100" and divide it into 3500, we get 1.673, or a 67.3% increase. If we divide 67.3% by 10 years, we get 6.73% per year, as stated above. However, this is the wrong way to do it. Approximately 5.3% per year, as Edmond calculated, is correct because 1.053 raised to the 10th power is 1.676, close enough to 1.673.
@Edmond said OTOH, 2025 is 10 years away. The odds of a nice, smooth 5.3% each year are so infinitesimal as to not even to be considered a possibility. Wherever we wind up 10 years hence, it won't be a smooth ride.Observation: we are now in the midst of the 7th year of the current Bull. We are overdue for a Bear. And Bear events tend to correlate at/near Presidential handoffs.
Comments
That's not a stretch. -- In fact, its fairly conservative and may reflect secular headwinds of aging demographics and normalization (to some degree) of interest rates.
OTOH, 2025 is 10 years away. The odds of a nice, smooth 5.3% each year are so infinitesimal as to not even to be considered a possibility. Wherever we wind up 10 years hence, it won't be a smooth ride.
Observation: we are now in the midst of the 7th year of the current Bull. We are overdue for a Bear. And Bear events tend to correlate at/near Presidential handoffs.
caveat emptor
And we are shorting the products we are selling to our clients. And no, we are not obligated to tell our clients we are betting against what we are selling them. And yes, we are subverting "risk management" to speculate against the products knowing full well if we screw up, the government will come bail us out like they have in perpetuity.
Regards,
Ted
OTOH, 2025 is 10 years away. The odds of a nice, smooth 5.3% each year are so infinitesimal as to not even to be considered a possibility. Wherever we wind up 10 years hence, it won't be a smooth ride.Observation: we are now in the midst of the 7th year of the current Bull. We are overdue for a Bear. And Bear events tend to correlate at/near Presidential handoffs.
And History "BEARS" This Out With All It's Volatility
2000
-9.03%
2001
-11.85%
2002
-21.97%
2008
-36.55%
Overview of Markets 1928-2014
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html