Current Research N: Turning Points
Updated: February 28, 2009.
Current Research Index
Current Research Index
Current Research N: Turning Points
I group together a series of articles related to estimating when the market changes from a long lasting (secular) Bear Market to a Normal Market and vice versa.
P/E10 Sequences
I brought up the Scenario Surfer. I generated 20 years of P/E10 sequences. This gives us a glimpse into the likely future.
P/E10 Sequences
January 30, 2009 Letters to the Editor
P/E10 Sequences A
I brought up the Scenario Surfer. I repeated P/E10 Sequences with a P/E10=14 Normal Market instead of a Bear Market.
My conclusion: start from very high or very low P/E10 levels for estimating turning points. Intermediate P/E10 levels are appropriate only for short periods of time.
P/E10 Sequences A
Turning Points A
I have previously examined P/E10 Sequences on the Scenario Surfer with P/E10=14. My conclusion was that I should start from very high or very low P/E10 levels for estimating turning points.
This time I looked at a P/E10=26 Bear Market. The turning point estimates are reasonable.
Turning Points A
Turning Points B
I have previously examined P/E10 Sequences on the Scenario Surfer with P/E10=14. My conclusion was that I should start from very high or very low P/E10 levels for estimating turning points.
This time I looked at a P/E10=8 Normal Market. The turning point estimates are not as good as I would like.
Turning Points B
Turning Points C
I was dissatisfied when I looked at a P/E10=8 Normal Market. The turning point estimates were not as good as I would like.
This time, I extended the period to a full 30 years. The results were much, much better.
Turning Points C
Turning Points D
I looked at a P/E10=26 Bear Market. I extended the period to a full 30 years.
Turning Points D
Long Retirements and the Scenario Surfer
You can use the Scenario Surfer to prepare for long retirements. Here is how.
Long Retirements and the Scenario Surfer
6% for 60 Years
I used the Scenario Surfer to see if I could withdraw 6% for 60 years.
I came close.
6% for 60 Years
After the Turning Point
I used the Scenario Surfer. I looked at withdrawing 6% for 60 years in a Normal Market. We will see this after the next turning point.
You still need to be careful.
After the Turning Point
Reasonably Safe, Not Safe
I have repeated attempted to withdraw 6% (plus inflation) for 60 years using a traditional liquidation strategy in today’s market. All of my attempts have failed. They have been Reasonably Safe.
Reasonably Safe, Not Safe
6% and Safety
A 60-year Safe Withdrawal Rate of 6% (plus inflation) using a liquidation strategy is too much to ask for at today’s prices.
6% and Safety
Turning Points E
I looked at a P/E10=26 Bear Market. I collected more turning point statistics. I focused on when we will hit bottom.
Turning Points E
Turning Points F
I looked at a P/E10=8 Normal Market. I collected more turning point statistics. I focused on how long it takes to reach a top.
Turning Points F
Turning Points G
I combined my Turning Points E and F data. I calculated the likely range of stock market cycle periods. It comes close to what we have seen in the past.
Turning Points G