Where we will be 10 years from now
August 12, 2009
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In an article I wrote for Fool.com, I point out:
"According to Ibbotson Associates, of the 74 rolling 10-year periods since 1926 (i.e., 1926-1935, 1927-1936, and so on), U.S. large-cap stocks posted negative returns in just three of them. The first two were 1929-1938 (-0.89% compound annual return) and 1930-1939 (-0.05% compound annual return) and involved the Depression. The third loser decade was the most recent -- and the worst. From 1999-2008, U.S. large-cap stocks 'returned' a compound annual average of negative 1.38%. Who would have thought back in 1999, when we were more worried about Y2K than our 401(k), that in the subsequent decade big-name American stocks would do worse than they did in the 1930s? Not many."
Channeling Peter Bernstein, the author of Against the Gods: The Remarkable Story of Risk (whom I wrote about in this article), risk is the possibility that bad possibilities we know about become realities, but also that the future will include events that we're not even considering right now.
My wife and I often talk about how our lives have turned out much differently than we expected even five years ago, and certainly 10 years ago. It brings a certain humility to any attempt to predict the future (which, to some extent, is what investing is all about). That said...
I thought I'd have some fun and make some guesses about where we'll be 10 years from now. Feel free to add your own in the comments area below.
So, here are my predictions for 2019:
*The S&P 500 will be at 2,000 or a tad below
*The rate on the 10-year Treasury will be 8%
*Gary Coleman will finally get elected governor of California
*The eligibility age for Social Security will be increased to 70 for those 50 and under
*Something everyone expects but won't happen: China won't quite be the dominant player people expect due to internal unrest (central government vs. democracy movement, uneven distribution of prosperity, etc.)
*My children will still believe in Santa Claus, despite being teenagers
*Something everyone expects that will happen: Taxes will increase (OK, that one's easy)
*A Republican will be president, but it won't be Sarah Palin or Larry Craig (to see my Craig costume in the Washigton Post, click here and scroll down)
*We will talk about Facebook and YouTube the way today we talk about Netscape and Britney Spears
*All my hair will grow back (a guy can dream)
OK, your turn.
To read two articles I've written, sorta on this topic, check out "It's Already Worse Than the Depression" and "Diversification Isn't Dead."
Robert Brokamp is the senior advisor for The Motley Fool's Rule Your Retirement service.
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