Dow to 50,000 and gold to 300 over next four years?
lseecon
Posts: 318 ✭✭
With stocks at all time highs, the dollar at all time high, and with the rich and corporations about to get a gargantuan tax cut under a Trump Presidency, and the second amendment saved, I need someone to convince me why gold wont go back down to $300 or so an ounce where it was not too long ago. We all want to make money but just cant see how the stock market is not the place to be for the remainder our lifetimes. Im 46 and Ive see the 87 stock market "crash" the 2000 tech bubble "crash" and the 2008 "crash". Yet here we are making daily highs in the stock market again. The doom and gloomers (of which I have been one many times) are the people who flock to gold and silver, yet time and time again, the best place to keep your money is the same place where 99.9999% of the world's wealthy keep their money and made their money---- stocks-----. Will there be another stock market correction in my lifetime? sure, but will the stock market come roaring back to new highs, just like it always does? just as the sun will come up every morning, the stock market will always rebound. I just dont see any more reason to put much capital into gold and silver when that capital can be better deployed in the stock market. seems like putting money in stocks for the foreseeable future and then selling those stocks at much higher prices, then taking those profits and buying precious metals when gold is back down to 400 an ounce in a few years seems like a winning strategy. Many people bought gold as an alternative to the dollar and stocks, but those are at all time highs and at least in our lifetime there does not appear to be any legitimate alternative to the all mighty dollar. Some day perhaps, but for the next 50 years, there is no viable alternative to the dollar even if our debt grows to $100 trillion because no other country has a currency backed by any hard asset. We are in the throes of of the worlds largest creation of wealth, with new billionaires being minted every day (yes its on paper, but those billionaires are able to buy homes, yachts, gold watches, gold bars, gold cars, gold jewelry, etc with that "paper wealth" so its real wealth if they can buy hard assets with their stock market gains). If someone can tell me how or why it will end before I die, I am all ears.
Comments
I agree, some of my wealthiest friends, are stock market players. They paitently wait through the rocky times until they are behind them and gain back fast when times are roaring. I think we are getting ready to see a total change back to economic good times, stocks, real estate and pm's go bye bye. I am not so sure of 300 gold, but under 1k is close up on us IMO
strong dollar index will cause more economic problems than it can solve. PMs will suffer in the short term. One way to beat it down is to not raise rates Dec. 16. FED jawboning in the opposite direction may be in the cards. Might be a good contrarian bet.
As for the stock market? It's where they want your money so it will continue to be the place to put your money. PMs are part of a portfolio to protect from when they lose control of the stock market. Crashes show that it does occur. 2008 was not just a bad dream.
Inflation is currently in the cards, another reason to hold PMs. I will continue to hold some of my excess reserves in PMs until the money is needed elsewhere. I will also continue to buy the dips.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I'm waiting on roadrunner or derryb for their rebuttals
Until the government gets its economic house in order (paying down the national debt, balancing its budget, etc) I just don't see gold dropping to such lows as $300.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Personally, if gold goes (well) below $1k, I say...bring it. It just means that I can complete my gold Registry's quicker and cheaper. I'm selfish that way, sorry comrades. As for the stock market...I can see huge gains once the shackles are officially off big and small businesses.
pretty soon those rich cats can start paving the streets with gold, unless they're just too cheap. LOL
a 50,00 DOW is gonna be the result of some serious inflation with gold inflating right along with it.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
In four years? No way no how the DOW gets close to 50,000. 25,000 would be a hell of a stretch but is at least a realistic possibility if all the stars line up. Gold at $300? A lot higher probability but highly unlikely. $900 is realistic for gold in the next 4 years and I'd be surprised if gold didn't get close to $900 in that timeframe.
September 3, 1929 until November 23, 1954. That's how long it took the stock market to recover from its highest point before the stock market crash and great depression. 25 years. You would be 71 years old. The stock market is not a "sure" thing. The majority of self made millionaires did not make their fortunes in the stock market. Read the book, "The Millionaire Next Door" if you want to find the secret. Most people that become millionaire's are just ordinary people living next door that you would never guess they are wealthy. The don't live extravagantly and they are lifelong savers and work hard for their money. For most people, there is no short cut. Budget your expenses, control your expenditures, save a large portion of your income (Diversify in real estate, stocks, bonds, mutual funds, precious metals etc.), stay out of debt, work hard at your job, start your own business, etc. - these are the keys.
IMO, it all depends on whether the rest of the world continues to preserve the dollar as the international currency. That prospect faces geopolitical headwinds. And while there seems to be excitement a-building with Trump's plans to reignite the economy, I still don't see anyone--left or right--with plans to realistically address the dislocations wrought by globalization and technological advances. The social forces unleashed by the large number of people who are losing out to these historic events have yet to be fully felt.
Here's a warning parable for coin collectors...
What's that saying? Buy low, sell high. I agree with hchcoin, PerryHall, and derryb.
I knew it would happen.
Inflation....the great equilizer.
Knowledge is the enemy of fear
Not only does a strong dollar threaten gold, it threatens the stock market. For this reason alone look for "somebody" to pull the rug out from under the dollar.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Great bull markets have been associated with a strong dollar. Think 1995-2000.
I do like how you always include "them" or "smoebody" in your fears.
Knowledge is the enemy of fear
I like thinking 1979-80
I think economic good times are coming as well due to trumps administration but on the downside of that I see foreign unrest ie: terrorism and war knocking back the gains of us economic policy. Oil will be a problem until we get the oil from the US to produce as it can bypassing epa and other regulations.
I tend to agree with cohodk in that the US is strong compared to "everywhere else", or at least that's what I sense in his posts. Along those lines, I agree that everything is relative and that Trump might be successful in setting the table for a US economic comeback. Or, he might not. Time will tell.
However, the black swans haven't gone away and nothing's been corrected. The debt is still running rampant, spending is still out of control, the last several iterations of banking law, healthcare law & tax law are still in effect to no ordinary person's benefit. The white collar criminals and globalists are still in control while more and more poor, uneducated, illegal and unskilled people are on the public dole.
The pathways into the middle class may be irreparably damaged because many good jobs have been exported, and it may take a much longer recovery now to re-generate a work ethic that's been sabotaged in the education system. In addition, the negative effects of class warfare may only be beginning as this election cycle has seemingly brought out some ugly agendas into full view. Sorry if reality makes a less-than-rosy scenario more likely.
There are pension crises looming in several large states that will require additional rescue via money creation, a major entitlement program restructuring (and loss of benefits) that must take place, and a chronic government funding shortfall that only makes the debt worse, not better. With rates at historic lows, any rate increases will only make it harder for businesses to grow and create capital & more jobs. These things can only place a drag on the economy by sucking resources away from economic activity where it's needed most.
You can't have it both ways. If you think that tax reform means less tax on business, you might ask yourself just what spending is going to be cut. If you don't think that spending can be cut, you might ask yourself how much inflation is going to dilute the value of what you already own or hold. We are going to see the effects of poor management on a global scale. I truly don't know where it will end up. I do know that I won't be buying bonds, and I am very leery of what happens to stocks when bonds start selling off.
I knew it would happen.
I suspect sovereign debt is no longer a worry. With central banks absorbing it it goes into a black hole and is forgotten forever. What does matter with this arrangement is the resulting unlimited new money it demands. This money creation will expedite the devaluation of all currencies, and will go unnoticed by most until it is too late.
The central bank push on the DOW is intended to assist in the battle of inflation vs. deflation. "Inflate at all costs."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I think half of you are right, half of you are wrong, and the other half......well, I can't really say for sure.
Thread killer is back!
September 3, 1929 until November 23, 1954. That's how long it took the stock market to recover from its highest point before the stock market crash and great depression. 25 years
Well, actually, stocks pay dividends. An investment in the sp500 during the time you reference would have netted an almost 400% return.
If only gold paid a dividend
Knowledge is the enemy of fear
The predicted ranges and comments I've heard since my short 10 yr span in PMs.
Gold will go to $2000 and silver to $200
Gold will go to $500 and Silver to $20
Diamonds are a good investment
Bitcoin is a money replacement
Gold in Fort Knox and NY is (complicated enough to burst a brain artery)
I honestly don't know what I've learn from that, other than Hedging is expensive.
But I've had a lot of fun and would have felt terrible if I spent that PM money in a Casino or bought a condo.
I'm going to cash in two $20 Eagles and go on a cruise.
add me for a prediction of silver $11, and maybe an overshoot to $8
it was used for transactions early on
I only hear about flipping it now.
Casino, condo, cruise.
One of these is not like the others!
Liberty: Parent of Science & Industry
you can't buy a condo with 2 double eagles?
Term insurance, not whole life.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Of which most terms out worthless or requires death. How wonderful.
Knowledge is the enemy of fear
Another decade of this and we're all gonna need long term care insurance. Haha
Knowledge is the enemy of fear
Oh how i hate "insurance"!
It's a Bet that something Bad will happen. As long as it doesn't, you Lose every single bet.
If I had back all the money i wasted over 35 years on Insurance, and had "self insured" ( I've only had rare, tiny claims of any kind) and had invested the money, the total would be very large indeed.
Liberty: Parent of Science & Industry
if a frog had wings he wouldn't bump his butt on the ground.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
stock market at all time high? maybe 3 years ago. gold at 300 is laughable
Dividends averaged 6%/year during the Great Depression?
Yes
http://www.multpl.com/s-p-500-dividend-yield/table
Knowledge is the enemy of fear
Thats your response? Seriously?
Coulda at least said Warren Buffet thanks you for your contribution to his retirement fund.
Knowledge is the enemy of fear
That 6% gain was little consolation while the stocks themselves lost 80% of their value.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Someone should give Vanhalen some credit on this.....he got 1/2 of it .... 25,000 DOW wasn't that much of a stretch though, looking back, was it?
Now, the gold bit....sadly, not there.
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
derryb's wisdom posted in 2016
Only partially correct....It most certainly had a negative affect on gold, but not stocks.
What a bizarre, irrelevant, and irrational non sequitur!
Also, and again for you, false. Frog's butt would still hit on takeoff and especially landing.
Liberty: Parent of Science & Industry
Since 2016:
dollar has weakened from 102 to 96 with a low of 89. Rug pulled out from under dollar. ✔
Weaker dollar, stronger gold, from 1156 to a high of 1350, currently at 1282. ✔
Weaker dollar, stronger equities, S&P from 2238 to a high of 2929, currently at 2531. ✔
Fully correct.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Just trying to show you how idiotic it is to reflect on things in terms of "if."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Dude... you really know how to rub it in to the PMers. Salt in the wound!! Folks are 70-80% on PMs and dont even get the benefit of a dividend. Ouch!!
Knowledge is the enemy of fear
Dood. . .Ya gotta quit thinking of PMs as an investment and realize what their true worth is. In your case, consider them a hedge against your "bubble" investments. In my case they don't make money, they protect money.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
In my case they (PMs) don't make money ...... derryb 1/23/19
Finally an accurate comment!!! Whoohoo!!
Love ya derryb
Knowledge is the enemy of fear
I bought an ounce at spot and sold it for 5% more. It didn't make me money , but it did help to pay the utility bill.
The point was about the concept of insurance, but now the subject is cash flow versus capital appreciation. Anyway, yes please to all, beats the alternatives. Don't forget me and other doomsday doubters Do hold more PMs than we can lift by ourselves. Just in case ...
Liberty: Parent of Science & Industry
The statement was that stocks, not people, lost 80% of their value during the depression. Apparently a lot of people lost 100%. And while a dividend sounds great on paper, it actually reduces the amount of capital that is reinvested into the company that likely would have driven up the value of the company. Dividends may be great for the short term investor, but the long term investor is more rewarded with company growth that will drive up his share value. The FANG's are a good example of the benefit of this reinvestment of revenue.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
.
LOL, Yeah... Dividends are only great if you are a short term investor.
I bought a stock yesterday (for my grandson, not for me - are you kidding?) Time to really load up on metals.
Question for BL, have reinvested dividends really spiked upwards 4X more than the gains in the underlying stocks in the past 10 years? That chart doesn't seem to make much sense. Seems very odd. Please explain.
I knew it would happen.
The comment was "the long term investor is more rewarded with company growth that will drive up share value." Your chart shows an impressive approx. 250% return when dividends were reinvested by the shareholder since approx 2012.
Note that when in lieu of paying dividends the FANGs (FB, AMZN, NFLX, GOOGL) reinvested in company growth. Result over 12 years was an increase of 1,111% in stock value which equates to an annualized return of 28% to the shareholder. The little old ladies love hearing the broker tell them they received 6% dividends for the year. The reality is their 6% and a slower share price gain netted them much less than the smart money's more aggressive 28% annual return.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey