Dear FutureMoneyTrends.com Member,
Looking at stock returns by decade, these past 15 years have been an utter disappointment to those hoping for a 1980s and 1990s repeat.
In the 1980s, the S&P 500 Index had a 10-year annualized return of 17.5%. This was followed by one of the greatest decades in American history. A combination of two major forces, the ramp up of the baby boomers’ peak spending habits and the Internet, a communications revolution. The 1990s helped investors see a 10-year annualized return of 18.2%.
Since then, the economy has been through one severe recession, a financial panic, and is currently in depression. The annualized returns for the first decade of this century, was negative 0.9%.
Looking at government debt and our demographically top heavy population, we are likely entering the final 5 to 7 years of this downturn. The worst unfortunately is probably just a few years ahead of us, but the good news is once this is behind us, an economic boom will likely follow.
Technology is moving at a shocking rate, and the largest generation, the echo-boomers (Millennials) will be approaching their peak spending habits at the start of the 2020s. The echo-boomers, the children of the baby boomers, are a population of 80 million people. This is 4 million more than the baby boomers. Depending on when you mark the start and end of this generation, some estimates have it at over 95 million.
Despite the government, we may actually be able to work through our structural problems over the next 5 years thanks to technology and a supporting demographic. There are plenty of reasons to be optimistic, but we should all be vigilant in 2015. We are still in a currency war, the fate of USD is unknown, and the U.S. economy is in a real structural depression, with severe imbalances from government programs.
Our Recommendation: Stick with a core group of safe stocks, buy extremes, and continue to focus on income from stocks, rental property, and tapping into our Extra Income Ideas and Cash Flow for Life letters.
Happy New Year!
Editor’s Note: Get extra income ideas and investment ideas that are completely outside of the banking sector in our premium membership letter. You can also find our Forever Stock portfolio. These are the best businesses in the world; ones that can help you create a dividend cash flow machine!