We’ve been writing about the absurdity of trading stocks for a long time. Back in mid-2008 when the DJIA fell below its 2000 high of 11,722, it was obvious to investors that their portfolios had flat-lined for eight years. Yes, zero return on your portfolio for eight years. Actually it’s far worse when you deduct fees, commissions, taxes and account for inflation: Many portfolios lost over 65% of their value since 2000.
And if that stock market performance isn’t scary enough, listen to what Shilling sees for the next decade, based on our financial history from 1949 to 2009. Sixty years of bull/bear cycles will project forward into a secular bear for the next decade, to about 2020, with occasional short-term cyclical bull markets and dead-cat bounces.
In short, expect a very rough decade for the economy, the market, and the taxpaying public. Here’s Shilling’s history of past cycles that run 15- to 20-year log bull and bear cycles the past 60 years:
