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The Lost Decade vs.
The Next Decade
by Troy Patton, CPA - Finance Geek
 Looking
back ten years ago, when the economy was great, the
market was cranking to all-time highs, reminds us that it does not necessarily
mean investing for the next ten years will give us great success.
It was easy to think
you were a genius in 1998 and 1999 as you put money in and went on to return 20%
or 80% if you were investing in technology. Then, slowly and in some cases
rapidly, over the next ten years, you saw any gains you made disappear. Well,
for those who have the perseverance and guts to stay invested, history tells us
you will be rewarded again.
In the table, I have
shown what the following ten year return was anytime the previous ten years was
relatively weak. The average return for the next ten years was 183%. The worst
ten year performance was 101% (which was the Great Depression followed by WWII).
(continued below)
I think
you can see from the table what I am going to say for the next ten years. It may
be one of the best opportunities to be in the stock market. I plan to be around
in ten years investing in the stock market, so if it does not work out, give me
a call. I will have my money invested.
If you
think there is no fuel for a rally, then think again. It is easy to forget the
market is only worth what people are willing to pay for it. Much of this decline
in the market has been exacerbated by hedge fund liquidations, rogue investors
making stupid bets in a big way.
(continued below)
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Just like
when I told you oil was going to fall, now oil is too low at the mid 30’s. I
think when this economy starts to turn, oil will once again rise back to the
$70-$90 level. As you can now understand that all markets revert back to a mean
after emotions drive them one way or the other.
Once many
of these hedge funds fold, the cash sitting on the sidelines will push back to
the market and drive it higher than it should be. Time to then Sell.
The opinions written within this publications are
the opinions of Troy Patton and are not intended as investment advice or an
offer or solicitation to buy or sell any securities. If you would like to
contact Troy Patton, he can be reached directly at 800-671-5872
Are you a dentist
considering or going through a divorce? Get a business valuation
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 Have
a finance question or a comment for me?
Send
it to
tony@financegeeks.com
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