Stock Market

Madness

Below is what Dshort has to say:

The regression trendline drawn through the data clarifies the secular pattern of variance from the trend — those multi-year periods when the market trades above and below trend. That regression slope, incidentally, represents an annualized growth rate of 1.90%.

The peak in 2000 marked an unprecedented 129% overshooting of the trend — substantially above the overshoot in 1929. The index had been above trend for two decades, with one exception: it dipped about 15% below trend briefly in March of 2009. At the beginning of October 2021, it is 178% above trend. The major troughs of the past saw declines in excess of 50% below the trend. If the current S&P 500 were sitting squarely on the regression, it would be at the 1604 level.

DYI:  The U.S. stock market has left planet earth with valuations going to the moon.  Purchasing stocks or holding stocks (bought earlier) on a wholesale basis – S&P 500 index fund or a generalized growth fund all so very common in 401k’s – your average annual estimated rate of return over the next 10 years as calculated by money chimp is – drum roll please – negative 2.93%.  A return that does not fund retirement. Obviously.  This is history in the making with valuations never seen in our stock market since 1871.  This is a horrible time to invest in stocks for the long haul as these conditions only merit speculation but has undoubtedly left the realms of investing years ago.

So hold onto your hats; along with your cash and gold better valuation lie ahead.

DYI