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01-05-2016, 05:47 PM
(This post was last modified: 01-05-2016, 05:48 PM by Dividend Watcher.)
Sort of like the old saying that "economists predicted 8 out of the last 5 recessions". Interesting read but, you're right, everyone had their own opinions.
I'm not sure that there's a set of empirical facts to predict anything as large and complex as a national, let alone world, economy. For example, sometimes tax cuts stimulate spending and other times they stimulate deleveraging. Too many variables to come up with with a definitive answer.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
Predicting the economy is tough. If I had to make a prediction, I think the biggest threats to the US economy are weakening emerging markets. I would not be surprised if we saw a couple 5-10% market corrections and maybe even a 20%+ market correction. We might be in the beginning a correction right now. I plan to keep some cash available to take advantage of these potential opportunities.
Predicting the economy reminds me of an old joke:
A mathematician, accountant, and economist are interviewing for a job.
The interviewer asks the mathematician, "What is 2+2?"
The mathematician replies "4."
The interviewer asks the accountant, "What is 2+2?"
The accountant replies "4 plus or minus 5%."
The interviewer asks the economist, "What is 2+2?"
The economist replies "What do you want it to be?"
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I read an article recently saying the majority of well paid market forecasters are wrong and had a fun graph comparing their deviation from the historical mean. I can find it at the moment, but the bottom line is you're not going to guess the market so just keep putting money in and ride the wave. Mathematically it'll eventually turn out in your favor.