S&P Could Top 10,000 By End of Decade
There was plenty of green on the screen in Thursday’s trading.
The S&P 500 blew past its 4,000 level milestone (remember when I said to buy “spiders” the index fund mimics the S&P 500 on the podcast in August?)…and, I suspect there’s still additional upside ahead. In Thursday’s podcast, for example, I explain why I wouldn’t be surprised to see the S&P 500 at 10,000 by the end of the decade. (Third chapter toward the end in the clip below. And, don’t forget to sign up!)
Although you know I’m not a fan of the Biden Administration’s massive spending efforts, I’m a realist when it comes to investment. The Administration’s spending will have an inflationary effect on stock market prices and Americans need to prepare for that. Indeed, barring any massive uptick in capital gains taxes on investment income, I expect we’ll continue to see significant upside in market valuations.
There are risks. And, yes…I worry about a bubble. I worry about fragility in our market system (especially the vulnerability of big players thanks to the growth of dark pools – Bill Hwang’s hedge fund disaster is an example)…nonetheless, if you’re an investor looking to profit off the big spenders in Washington? You probably want to have some money invested.
We’re living in unprecedented times. When in history have we ever seen such a growth in the money supply? (We haven’t.) And, government is just getting started! Consider the reality that President Biden intends to keep on spending just as Fed Chief Jerome Powell intends to keep on printing. Money will be everywhere — and this means, asset inflation.
I also suspect it will mean inflation in other prices – including food and energy (as we’ve seen) as well as housing. As for wages, thus far it hasn’t materialized.
Which is all the more reason to prepare…
HOW do you prepare? You probably need to make sure you’re diversifying your assets into various market opportunities – NOT stuffing under the mattress where the value of your U.S. values will deteriorate.
I’m a big believer in a dollar cost averaging technique that helps you whether the ups and down. You want to be in a diversified portfolio that provides exposure to equity markets, fixed income markets, and hard assets including real estate, gold, and other physical commodities. I have some ideas on how to get started, here on Trish Intel.
Good luck and keep me posted.