Reply to When do you think the stock market will crash?

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Reply to "When do you think the stock market will crash?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]There needs to be a 10-15% correction to bring it back to a normal long term rate. For those of us who have invested for many years we expect this to happen and we have learned to live with it. I'm not putting anything more into the market and all dividends and new savings are going into a cash account. [/quote]

Long term rate?

If you look at trends, going back to the 90s before LTCM and the Fed actively bailing out bubbles crashes, stocks would drop by more than half.

[img]https://inflationdata.com/Inflation/images/charts/Stocks/Inflation%20Adj%20NYSE%20Oct%202017a.png[/img]

But I don’t expect Fed to ever stop pumping, so honestly, RISK ON. [/quote]

Since the 1930's or so the market CAGR has been about 8%. 2018 the market was flat or slightly down and it's up something like 25%+ this year so for two years its up about 12-13% per year. A 10-15% correction next year would bring the three year rate down to about 8% per year or consistent with the long term rate. You can have big drops that are well past being a correction but then you have rebounds. [/quote]

3 year rate is meaningless when Fed has been manipulating since 90s and all-in bailout mode since TARP[/quote]

The average since 1930 is around 8% - the 3 year rate is simply consistent with the long term rate. [/quote]

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