Stock Markets

[CVA-42]

Where do you think the U.S. equities (stocks) markets are going this year and why do you think that?

[Joe Frickin' Friday]

For a simple up-or-down prediction, a coin toss will be correct half of the time. Likewise, anybody can make a single prediction for what will happen in any given year - but I have not yet heard of a particular individual who has a track record, year-after-year, that's significantly better than 50-50 - so I think it's unwise to base real investment decisions on this (which amounts to attempting to "time" the market).

 

Now that that's out of the way, my worthless prediction is that it's going to be pretty flat, or possibly decline.

[Dave McReynolds]

I feel like all the growth we've seen in the last couple of years has been artificial, based on the government keeping interest rates artificially low and propping up the economy with massive, unprecedented levels of borrowing. I suppose the theory is that at some point, the economic engine will be able to run on its own, and all this support won't be necessary.

 

The problem with making a prediction about the stock market, is that you're really predicting how long the government can prop things up. My guess a couple of years ago would have been, not this long, and people who pulled their money out of the market then missed the big run up of the last few years. People who thought they were being super conservative and invested in gold back then lost a bunch of money and would have been better off just leaving their money in a checking account.

 

Everything I think I know about the economy tells me that it has a shaky foundation and has to come crumbling down one of these days, but I can't tell you when.

[chrisolson]

From its beginnings, the only true prediction of the Market is that given enough time, the trend has been up.

 

As Dave pints out, the current governmental assist can't go on forever and the thought was/is that when it goes away it will be bad. And yes, in 2013 when only rumors of cutting back on quantative easing where whispered, the market tanked on every rumor.

 

And yet, when the Fed came out in December and actually said cutting back was going to begin (ever so slightly), the marked soared. One might interpret that as a sign the market agrees that things are getting better. But, the market is also so subject to whims of fancy, so that at any given time, the short term is always a gamble. But my money is bet on the market staying mostly stable ending the year higher than it started.

[John Ranalletta]

A lot depends on alternatives. Bonds will crater when interest rates rise. Real estate will tank with higher rates. Commodities are in a funk and will stay there as long as the manufacturing economy is slow; so, the market may stay up because it's the only place to put money to work.

[DiggerJim]

For a simple up-or-down prediction, a coin toss will be correct half of the time.

You can do better by predicting that it will be like last year. Most cycles run in multiple years so you can get into the 60-70% "correct" range if you guess it will be like last year. You're only wrong on the cusp years when it changes direction.

 

None of which is helpful in making investment decisions though :-)

 

[philbytx]

!

I believe none of us on the forum are in the circle of jerks manipulating global financial markets.

 

 

[Selden]

A lot depends on alternatives. Bonds will crater when interest rates rise. Real estate will tank with higher rates. Commodities are in a funk and will stay there as long as the manufacturing economy is slow; so, the market may stay up because it's the only place to put money to work.

[ESokoloff]

For a simple up-or-down prediction, a coin toss will be correct half of the time........

 

Not quite.

 

As to the stock market.......

 

No clue.

 

[Kathy R]

Since I'm not going to lose much more than my pride by being wrong, I'm going to predict that in 2014 the DOW will settle down into the 14,000's and interest rates will rise, breathing life back into bonds. Yes, I am taking the FED at their word. Even with the hand over of power, I believe the same peeps are forever in charge.

 

I've been a pig in a mud hole watching my long term equities, but there is nowhere to put new money. I think that will begin to change this coming year.

 

[Patallaire]

Ok, I will play. I predict that the market will go up and down through-out the year!!! I also predict that it will end up higher than this year, but not by more that a thousand points. Last year I hit it exactly at 16,500+, I don't think the Bond market is going to be strong, nor do I think that Emerging markets are going to be in an upward rally.

The fact of the matter is that the only thing I suggested that will be accurate is that the markets will go up and down throughout the year.

That doesn't really matter, what matters is what are your goals and how are you going to get there?

[1LIFE2LIVE]

Precious metals will bottom early this year and begin to move up; Interest rates will continue to gradually increase; natural gas prices will decline after this severe cold snap; stocks will continue to churn higher with some bumps and reach new highs.

 

Lots of choices, strategies and trends out there to choose from.

 

0.00

 

 

[Sonor]

Being a fan of Marketwatch.com and a complete nubie to anything investment related, I will say, "it depends." (man, with an answer like that I should run for office)

Seriously, there are a number of factors in flux right now to say one way or the other about the delta of Jan. to Dec. 2014. But if all indicators are correct (again from what I have read and my understanding) the first two quarters are going to be in flux and the end of the year will be on the upswing. But let me also throw in the caveat, it depends.

 

There! If I run for office I expect your vote.

[CVA-42]

Thanks you all for the opinions. I learned a long time ago not to try to "time" the market but it doesn't hurt to have all the information you can get. Being 66 years old, I don't want to be heavily invested in any bear markets. Been there and done that. My tea leaves are probably closest to Kathy's. I think we are getting closer to having more favorable investment choices accompanied by a leveling off of the Bull Market. But that's only IMHO.

[smiller]

That doesn't really matter, what matters is what are your goals and how are you going to get there?

This is ultimately the answer of course, have a well-reasoned plan and stick to it regardless of the noise, in the long term that advice will always be correct. If what happens in the stock market in any given year has a material effect on your day-to-day life then you aren't invested properly.

 

But it's always fun to speculate. I don't know what will happen this year but I'd be quite happy if the market did little but absorb the taper and consolidate at this level. A cooling off period would probably be healthy at this point. Funny though, it doesn't always listen to me.

[Red]

Unless you are investing in an index of an exchange like NYSE or NASDAQ, the operative advise this year is that it is a market of stocks and not a stock market.

Earnings matter and PE's can only increase so long before some folk realize 'the market' is over extended.

Barring exogenous shocks (Iran/Syria/China)the NYSE will be up a modest amount at year end based on increased industrial production, increased employment, lower dollar, flat trend in emerging markets for commodities.

[1LIFE2LIVE]

This was in Marketwatch over the weekend - he and his wife retired at 30:

 

http://www.mrmoneymustache.com/2013/02/22/

[Jake]

This was in Marketwatch over the weekend - he and his wife retired at 30:

 

http://www.mrmoneymustache.com/2013/02/22/

 

I've been following his blog for a good while. Very entertaining mostly, and well written stuff. Looks up his definition of frugal vs. cheap and you'll have a good read.

 

 

[Joe Frickin' Friday]

This was in Marketwatch over the weekend - he and his wife retired at 30:

 

http://www.mrmoneymustache.com/2013/02/22/

 

His plan works well if you don't mind living the rest of your life with the same annual budget you had when you were saving so aggressively.

 

Me? I'm saving aggressively, but not that aggressively; I want to have some fun along the way.

 

That said, I like his philosophy toward DIY as self-pay, self-satisfaction, learning new skills, and physical exercise.

[philbytx]

I agree with Mitch on all his points. We saved aggressively but also had a lot of fun along the way !

 

A lot of what he espouses, I learned from my grandfather and father who experienced the depression and two world wars (the rainy day stuff!).

 

Deb and I still do almost all the work around the house and enjoy looking after our "stuff", with maintenance and repairs. However, if something comes along that is a PITA, we have the resources to pay for it. Simplifying sometimes also means not wearing yourself out !

 

IMHO - He's actually deluding himself a little at the moment. I would like to see his blog when he reaches his 50's (or earlier!) and starts slowing down. Hopefully, he and his family will not experience any accidents or illnesses along the way .

 

With us, retiring meant simplifying our life even more and enjoying our "other" wealth, which is our oh! so valuable time on this planet .

 

 

 

[Joe Frickin' Friday]

However, if something comes along that is a PITA, we have the resources to pay for it. Simplifying sometimes also means not wearing yourself out !

 

Agreed. I mow my lawn and shovel my driveway, but I had no problem shelling out thousands of bucks to hire professional roofers when it was called for.

 

 

[tobyzusa]

...interest rates will rise, breathing life back into bonds...

 

Think it works in the other direction Kathy. Don't go throwing down on bonds quite so quickly!