Click to enlarge.
There were clearly better times in all of recorded history to swing for the fences. For example, 1982 looks pretty darned good in hindsight. Got time machine?
As a retired saver, I cannot afford to take big risks with my nest egg. I have no job to fall back on if the gambling doesn't pay off.
This is not investment advice.
See Also:
Sarcasm Disclaimer
Source Data:
St. Louis Fed: Real S&P 500 Index (October 2012 Dollars)
Looks like we're due for a steep dropoff.
ReplyDeleteI think Bernanke's out of QE tools to keep stock prices up.
Scott,
ReplyDeleteLooks like we're due for a steep dropoff.
At the very least, it would seem that conditions are not perfect for a massive long-term equity rally.
If the rate of inflation turns negative (deflation), then even if GDP were to decrease, there could still be real GDP growth if GDP were to decrease at a rate less than the rate of deflation. The same could be said about your chart - so look on the bright side of life!
ReplyDeleteThere does not seem to be another surge of institutional money like after the dot-com bubble burst. So it must be corporate profits driving stock market growth - which has probably peaked - and of course QE thinking.
http://research.stlouisfed.org/fred2/series/WIMFSL
Luke Smith,
ReplyDeleteThe Institutional Money Funds chart looks very interesting. I'm definitely looking forward to playing with that data.