For people interested in Gold (V: hint, hint)

> "Although I wouldn't want my money in
> the US market after around 2008 (or probably
> even earlier)..." Why is that?

> Here's what I am thinking...

> Pull out just before 2008. Watch the stock
> price drop and then buy up again.

> If you are buying and holding for long term,
> does it really matter that much what the
> stock will do in the short term?

Hi Michael,

I'm following the model proposed by Harry S. Dent.... You can read more about it by clicking here....

If you click on the little graph on that page, you can see a larger version. This graph gives a prediction for how the US economy will go, based on demographics (in particular, from the birth rate, shifted by 46.5 years).

(The age of 46.5 years is used, since it approximates the age of peak spending.... At around that age, people are spending the most that they do in their lives. That's partly because as well as spending on themselves, they're also spending for their teenage kids.)

The red bar graph is from birth rates, and the yellow line is the Down Jones index (adjusted for inflation). You can see that the birth rates, shifted by 46.5 years, gives a reasonable prediction of the Dow Jones index....

According to this graph, after around 2008 the Dow Jones should start plunging. Unfortunately, it predicts that this will last a long time, too - until around 2022 or so....

Will this really happen? It might not.... But it seems prudent to be aware of this possibility.

As for other countries, they all have different demographics.... One interesting thing about Harry Dent's book "The Roaring 2000s Investor" is he goes through these kinds of graphs for many other countries. This suggests that at about that time - around 2008 - it might be wise to have your money invested in countries whose stock markets should be on the way up (if this model applies there). That is, their birth rates suggest that their economies will still be booming. Some of those countries are places like South Korea, Hong Kong, Singapore, Spain....

Will it hold? I don't really know.... I still have questions about it all I'd like to have answered (so I plan to do more of my own research). However, it is an interesting thing to look into and consider....

- Dien Rice