Things may Be Different

THINGS MAY BE VERY DIFFERENT for the Next 10 - 20 Years or Longer

Possible indications of watershed change in the investment climate of an entire generation

Consider the following:

• When Bull Markets top out, long, bearish tails often follow (lasting 15 - 25 years)
• Demographics: What happens to equity markets when 76 million baby-boomers begin to withdraw their money for retirement? (Might it be the opposite of what happened in the 90's when the same boomers were buying into the market?)
• Growing trade and budget deficits: (Out of balance means unstable). These are uncharted waters.  Never has the US, as the dominant economic power of the world, taken on so much debt.
• War and Terrorism at best create uncertainty; at worst create human and infrastructure disasters.
• Globalization: China, India and the squeeze on profits:
  • US Business can't reduce costs as international demand causes commodity prices to skyrocket
  • US Business can't raise prices because of low cost competition from developing countries
  • Emerging economies increase competition for investment capital - Higher demand for money means that costs for business (interest rates) go up, and that bond portfolios lose value.

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