DOW INDUSTRIALS MONTHLY 100 YEARS CHART TELLS US TO ....
Updated
BUY STOCKS, INDIVIDUAL STOCKS, NOT THE MARKET. But I explain this at the end.
First, thanks to TradingView user russ.brown.52 for putting up your long term trendlines chart on the DJIA. I decided to add some internal trendlines (in green) that capture the movement within the extremes of price. You can see that those internal trendlines are just under the current market from 14000-9000, but rising steadily.
I then added some important points about how the FED has acted strongly to avoid the DISASTER that we experienced in the post 1974 environment for the stock market where inflation ripped apart the values of stocks by over 64%. Although most people argue that current inflation rates are much higher than are reported, keeping rates lower than historically normal has kept the system afloat and awash in cash and credit.
I then added the market cycles from 1942-1981 and 1981-present are very similar and fortunately for me I found the pattern in 2001 and have been able to find innumerable comparisons and unreal similarities of those two time frames. Although I missed publishing a book to announce to the world, I did present my findings to hundreds of people through my investment group, presentations direct to hedge funds and many individual investors over the past 13 years. I encourage you to read the books by Harry Dent. His books go a long way towards explaining the population cycles that drove this pattern. In short, we face the headwinds of people leaving the workforce in the next 10 years and the costs of caring for our elderly population. We also face the lack of spending from large family households going forward, which will restrain economic activity for well over a decade.
I hope you can take away from this chart that it is important to understand the long term cycles driving the market. I would add that it is important to begin to hedge any risks associated if the market were to return to its long term trends. The market is poised to drift sideways to up 30% for another 10-20 years and confound a majority of people. This chart shows us that we need to find other ways to grow our retirement portfolios because the average stock is not going to generate a big enough return. We have to find growth stocks that can increase by multiples as opposed to earning 3%-6% at best in the stock market for the next 10-20 years.
So, thank you to the FED for doing everything you could to keep from repeating the pattern of the past. And sorry to the savers and the retirees who have had to suffer because reported inflation is not keeping up with real-world price increases and for not being able to earn a decent return from your savings in the bank.
Thank you to those that fostered and encouraged the growth in the internet and all the technologies that support it. The internet is simply the greatest wealth building "FOUNTAIN OF WEALTH" since the internal combustion engine and electricity.
Tim West
First, thanks to TradingView user russ.brown.52 for putting up your long term trendlines chart on the DJIA. I decided to add some internal trendlines (in green) that capture the movement within the extremes of price. You can see that those internal trendlines are just under the current market from 14000-9000, but rising steadily.
I then added some important points about how the FED has acted strongly to avoid the DISASTER that we experienced in the post 1974 environment for the stock market where inflation ripped apart the values of stocks by over 64%. Although most people argue that current inflation rates are much higher than are reported, keeping rates lower than historically normal has kept the system afloat and awash in cash and credit.
I then added the market cycles from 1942-1981 and 1981-present are very similar and fortunately for me I found the pattern in 2001 and have been able to find innumerable comparisons and unreal similarities of those two time frames. Although I missed publishing a book to announce to the world, I did present my findings to hundreds of people through my investment group, presentations direct to hedge funds and many individual investors over the past 13 years. I encourage you to read the books by Harry Dent. His books go a long way towards explaining the population cycles that drove this pattern. In short, we face the headwinds of people leaving the workforce in the next 10 years and the costs of caring for our elderly population. We also face the lack of spending from large family households going forward, which will restrain economic activity for well over a decade.
I hope you can take away from this chart that it is important to understand the long term cycles driving the market. I would add that it is important to begin to hedge any risks associated if the market were to return to its long term trends. The market is poised to drift sideways to up 30% for another 10-20 years and confound a majority of people. This chart shows us that we need to find other ways to grow our retirement portfolios because the average stock is not going to generate a big enough return. We have to find growth stocks that can increase by multiples as opposed to earning 3%-6% at best in the stock market for the next 10-20 years.
So, thank you to the FED for doing everything you could to keep from repeating the pattern of the past. And sorry to the savers and the retirees who have had to suffer because reported inflation is not keeping up with real-world price increases and for not being able to earn a decent return from your savings in the bank.
Thank you to those that fostered and encouraged the growth in the internet and all the technologies that support it. The internet is simply the greatest wealth building "FOUNTAIN OF WEALTH" since the internal combustion engine and electricity.
Tim West
Note
Reagan took over in January 1981. Notice the similarity to today (Jan 23, 2017).Note
As Reagan took office, after a sizable 10% rally from the election lows in November at 924, there was a drop from a peak at 1021 down to 787 (-234 points or 22.9%) in the DJIA after Reagan took office, but then there was upside to 2700+ by August 1987.
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