No, Obama’s only been elected once!

JLP, I still say you ought to have a bit in bonds, dull as they might be. At your age (40ish), a 60/40 asset allocation might be something to consider. By the way, a laddered portfolio of CDs (I’m thinking five-year CDs) counts toward that 40%. Some five year CDs are pushing 4% these days.

Just a thought.

Just my $.02.

Hope is the operative word here. The reality, I fear, is more grim. We have been extending debt at a faster pace than GDP growth since the mid-80s. The difference between the two has grown substantially in the 2000s. But, that has stopped. Now, we are witnessing debt deflation or eradication. GDP was artificially high due to the extra debt. Now it must compete against a shrinking debt base. Gonna be tough. Even with the government creating more debt, it won’t has as strong of an effect as private sector debt since the government fails to utilize capital as effectively as the private sector.

@Turning Heel: The 85 P/E value that JLP refers to is reported earnings. The 22x you reference is operating earnings. There is a huge difference between the two. Reported earnings are figued by using the official GAAP accounting methods. It shows the bottom line (meaning real) earnings a company creates. Operating earnings are reported earnings minus “one-time” expenses. These expenses could include restructurings, write-downs (think banks), layoff expenses, and any other item the accountants deem as “one-time” or non-recurring. As you can imagine, the craft accountants at the corporations have been discounting lots of expenses as one-time items. And, these differences between the two earnings are getting larger every year. In the early 1990s, when operating earnings got its start, the difference was less than 10% between operating and reported. Now, it is over 30% and climbing. The reality is investors are buying a future stream of earnings when you buy a stock. If you ignore the “one-time expenses”, you may be expecting more earnings than you will eventually receive. So, I would keep my eye on reported earnings P/E ratios if I were you. Every secular bull market has had a P/E ratio of 10 or below – based on reported, not operating, earnings. I suspect we won’t see a long term bull until we get back to those levels.

That means the next decade may not be much better. Many pundits will say that the low return for the 2000s dictate a good return this decade, but the 80s and 90s were the best performing decades ever for the stock market. We may have been way overvalued, and it could take a while to get though that.

Hate to be an Ebeneezer Scrooge so close to Christmas.

I predict more ups and downs in the next decade and I’ll work to make sure the ups outnumber the downs.

Mind you, I am in positive territory overall but this is because a) I made money in real estate b) I wasn’t fully invested c) I got some money back this year not all though. Still negative ROI for the last 2 years in 401K, but -8.6% in that period isn’t terrible. Not sure about ROI during last 10 years in 401K – after my employer modified the plan, the history before 1/1/2008 was lost. I have it on paper, but it’s too much hustle to go through all paper statements and calculate ROI.