Repricing a Market Priced for Zero

The most challenging financial event for investors in the coming decade will be the repricing of securities to valuations that imply adequate long-term returns, following more than a decade of reckless and intentional Fed-induced yield-seeking speculation.

Indeed, measured from the recent market peak, I expect S&P 500 total returns to be negative , on average, for well over a decade – an outcome I also projected at the 2000 market peak. That said, if a steep market decline was to front-load those losses, investors could also enjoy prospects for satisfactory long-term returns even a year or two from now. It’s current valuation extremes, and the dismal long-term returns they imply, that long-term investors may want to think twice about locking in.

https://www.hussmanfunds.com/comment/mc220429/

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This is why it’s so important to make a lot of predictions as a fund manager, call the top every year and you’re guaranteed a set of marketable quotes in the coming decades to help sell extremely expensive, underperforming funds.

Cynicism aside, I agree with the central arguments being made.

That said, if a steep market decline was to front-load those losses, investors could also enjoy prospects for satisfactory long-term returns even a year or two from now.

This is also important, for young people purely from an investment perspective a big crash soon would be best as we could have more reasonable expected returns in the long run a sustained period of high asset prices would actually be much worse.

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Yes absolutely. Anyone starting today should be hoping for a crash, particularly in the very expensive and large US market which I’d expect to dominate global markets at least the next decade or two.

Unfortunately people prefer the opposite and a crash tends to put people off investing for years afterward.

Yes absolutely. Anyone starting today should be hoping for a crash, particularly in the very expensive and large US market which I’d expect to dominate global markets at least the next decade or two.

A part from the fact it is a global market and could cause problems in the UK loss of jobs, inflation and cost of goods rising, rising interest rates effecting mortgages and loans and introduction of austerraty may mean any money saved for investing could be long gone and less opportunities to put aside for investments.

UK’s 2018 recession was basically caused because of US mortgage debt.

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I do believe in most cases the US market is overpriced. Sure a few share consolidations might help in the short term.

As for a total stock market crash (full bear market). I am not looking for this as there is a possibility it will affect far more than just the stock market, it’ll stand a chance of effecting the economy itself.

That said in this cost of living crisis anythings possible. For now we’ve had some dips/corrections that have have not been the worst so far, but who knows what’s to come.

All I know is that I am into mostly stable companies/investment trusts and ETFs and have money available to buy decent dips.

As I’ve said earlier today. While I don’t deny growth stocks are good for a small number of investors, I don’t think this investment style suits many.

I feel most of these companies are not usually well known and it’s harder to do research on them. Also it takes both strong conviction and balls of steel to hold them in a red month, let alone a full bear market.

I don’t pretend I could do it. I hold 2 growth stocks across 7 accounts so my growth stock footprint is small.