If anyone could completely predict what the stock Market will look like in twenty years, you might as well name them Nostradamus and hand them all the money in the world right now. Every market investor knows that it is not possible to predict the movements or changes in the market with one-hundred percent accuracy. The best that we can hope for is to make informed and educated guesses and just wait to see what happens.
· What The Greatest Investor In The World Thinks
There is no reason to be concerned about the markets says the Oracle of Omaha (aka Warren Buffet). In a September article on CNN Money, he predicted that the Dow Jones Industrial Index will hit one million within the next one-hundred years. This is a bold statement given that the market currently fluctuates between roughly twenty and twenty-five thousand. All of this goes to show that Buffet believes in world capitalism, and he does not see it going away anytime soon.
· China Will Continue To Shine
It happened without much fanfare, but China took over the top of the list for the world’s largest economy in 2014. It was something that had been predicted for some time, but many still feel as though they live in a reality that no longer exists. It is simply not the case that the United States is the world’s largest economy. With this dynamic shift, the United States has to take a back seat so to speak to some of the economic agenda setting and policy making of China.
The two countries are very much tied to each other economically, so what happens in one will likely be mirrored in the other. This could make for an interesting dynamic that keeps investors guessing.
· Are We In A Bubble?
Perhaps we are in a bubble in the market right now. There are certainly more signs that we are in a bubble than not. Still, twenty years is a long time frame to take a look at. The market increases in value through most ten year periods, let alone twenty years.
It is reasonable to assume that in twenty years the stock market will be higher than it is today. This year or next year may be a down year (perhaps even a big one!), but the overall trajectory of the market is to continue to climb. All investors, particularly those with a long time horizon for their investments should consider what kind of returns they may see after twenty years.
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