Trading Places X

- "The notion of trading markets can last well over a decade. Markets are typically range bound following major economic booms and busts as was seen in the US during the 1930s and 1970s or in Japan in the 1990s. Thus, this past decade’s post tech bubble bursting market and economic phenomenon should not be surprising nor considered unusual and is not necessarily part of a new normal construct, but rather a very old normal repeating itself. Indeed, such patterns can last longer than many investors want them to and it may be more critical to consider the catalysts for change in the future."
- "Several conditions may need to be met for a renewed secular bull market. After the 1930s equity market debacle and the Great Depression, people became so disenchanted with stocks and the financial system that it took high dividend yields to entice investors back into equities. While possibly shocking to some who are unaware of market history, dividend yields fell below Treasury bond yields only after the late-1950s such that stocks were viewed as income producing assets and were not purchased for capital gains. The clear discomfort with equities currently may demand the rise of the dividend again though tax treatment is uncertain."
- "Budget deficit reduction plans and evidence of their implementation are required. Given the explosion of the US debt burden without even considering the demographic pressures that will drive health care spending higher in coming years, it would seem that the investment community may insist on some real proof that the government will deal with these issues in a responsible manner. Since such approaches may prove politically unpopular, it could take another couple of election cycles to convince a wary populace."
- "Technological innovation often has generated opportunity. Throughout US history, a strong entrepreneurial spirit matched with the profit incentive inherent in capitalism, enforced legal protections and personal liberty has provided the fodder for invention and innovation which then blossomed into growth opportunity. The most obvious potential can be detected via the need for a much larger mobile broadband network given the likely penetration of smart wireless devices by 2013 and their insatiable consumption of bandwidth, which is already being strained presently."
- "A growing group of baby boom echo Americans will enter their saving years by 2013. While many pundits focus on aging baby boomers and their desire to supposedly shift assets away from volatile equities into allegedly safer fixed income vehicles, they ignore the baby boomers’ children whose population growth (albeit at a slower pace than witnessed for their parents) suggest a new segment of society that will be saving for retirement beginning in roughly three years. This crucial dynamic is often left out of the demographic debate."

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