How long can S&P continue?
I know the market obviously can't keep rising at the same rate it is now forever, but I was just talking to someone and realized how potentially close that time is. If the SP 500 index maintained a 10% growth rate for the next 50 years, the US stock market would be worth approximately $4.7 quadrillion. If the economy maintains the same growth rate now (2-3%), in 50 years the stock market will be so much larger than the economy that this will not be possible. If the market can no longer make such gains, what will the small investor do to save for retirement? Thinking about that is pretty scary tbh. Based on these assumptions, I realize that I need to diversify beyond securities for the future. I would like to know other people's opinions, can the market continue at this rate? What should we do to prepare?
This is a very bad look. Firstly, because the value of the dollar and the vast majority of fiat currencies has been declining for a long time, and secondly, because the SP500 has perhaps the largest volume of investment globally.
In general, the value of stocks will generally stop rising when investors are selling more stocks than they are buying. There may be many reasons for this, but none of them are very likely, or may well give rise to counter-arguments. As for investing for retirement, this may also be one of the reasons why people are betting on dividend-paying stocks. If Altria, for example, generates 8% a year from dividends, sustainably and over the long term, then I can be happy, even if share prices don't rise. At the same time, in theory, I may not mind even in a downturn, as long as I plan to just suck dividends out of the company, and those dividends are sustainable over the long term. Generally in investing I see growth investments, but where it is important to take profits early, then hedge some of the profits in dividend funds (ideally dividend ETFs for diversification), and try to multiply the rest somewhere else. Alternatively, play around more in general, as there are companies on the markets now that have great valuations and growth potential. You just have to look and not just follow the mainstream so much.
Another factor for hedging in retirement is that one should diversify the portfolio in general and into more assets.
So I would start with how much lower the value of the dollar will be;) I don't know if you are comfortable with the fact that the median valuation of the sp500 starts at 15x future earnings at current productivity. Do you think that 50 years ago productivity was the same as today and what will it be in the next 50 years? I assume that the top 50 will remain at best 5 companies that are in today's index.
Good question and 🤷♂️. So I give 50% for yes and no 😂
I have only 2 things to say about this, and they are:
1) $4.7 quadrillion... I honestly didn't even know quadrillions existed... I can't imagine that number that badly :-D
2) Bitcoin to the moon! :-D
No, in all seriousness... everything is in cycles... and all of it... so sooner or later America will collapse and some new world power and new market will take the lead... but when and who that will be, I don't even dare to guess... China would bid, India maybe?
I think we'll be happy if it lasts at least until the end of the year. If the Fed raises rates two more times, inflation will be replaced by deflation in the near future and that is a killer for the stock market.
It can't last forever, and I'm personally focusing more on Canada
This has been talked about for quite a long time - it just doesn't make sense to keep that historical performance of essey fajvhandrid at that 10% forever. From this, a lot of people conclude that long term it is better to start reducing exposure to the US market...m the question of course is where else to go with this 🤷♂️ Emerging? Europe? India and China?