Did anyone notice the Dow was down 224.64 today

[malaise]

http://newsvote.bbc.co.uk/2/shared/fds/hi/business/market_data/ticker/markets/default.stm

Word on BBC International News is that the news from Fanny Mae tomorrow will not help.

[GoesTo11]

1. What about my 10% historical returns?

Shouldn't I be a millionaire by now?

[malaise]

2. Your what? n/t

[GoesTo11]

8. I keep reading in USA Today that stocks return 10%

and we should put all our money in it to double every 7 years. Hasn't happened yet, but they just keep selling even harder to get us to put any extra money into the market. Shoot.

[Common Sense Party]

13. Over the last 80 years, the average annual return of the S&P 500

has been about 10.4%.

That's good times AND bad.

No one has eighty years to invest, but it's still instructive.

[GoesTo11]

14. Past returns are no guarantee of future performance

Over the last dozen years or so, nada. And looking at the situation today, it's hard to see it and think the next 20 years are going to be as good for us economically as the last 80 years. During that time, the US took over England's role as the world's most powerful country. The US lucked out with Keynesian growth of WWII building an infrastructure while Europe and Japan lost theirs, thus giving the US dominant economic positions in every market. Medical breakthroughs led to a more than doubling of population. And we got plentiful oil throughout the world. This was 80 years through good times and bad in terms of economic cycles, but not in terms of historical cycles - it was all good compared to most countries throughout history (at least up until 2000). Even if things don't go to hell, I don't see how we'll keep up that pace as an empire that is at best just barely holding on to a role as first among equals.

[Common Sense Party]

22. Last 10 years have been lousy. Past performance does not equal

future results.

You're pessimistic.

I'm incredibly optimistic. For anyone with 20 years or more until retirement, I don't know why one wouldn't want to be broadly, globally diversified among stocks, bonds, real estate and commodities.

I may be wrong. But I highly doubt it. I imagine that in 25 years, when I retire, I'll be very pleased that I invested in some of the best companies in the world. I also imagine that those who didn't will wish they had.

[GoesTo11]

24. Why be incredibly optimistic?

I don't think the next 25 years are going to be like the last 10 years - close to 0% in inflation adjusted terms. But not 7% real returns either. Global is probably better than US only. Even if the US turns things around, in an age of easy capital and information flow, the US isn't going to maintain a preeminent position. So other countries can rise up to meet our per capita GNP while we kind of languish. That said, the high historical returns in the US might still be too optimistic for projecting the world. These were the returns of a very well performing country. Some countries perform well, some don't. If we face an age where peace breaks out, or at least where the major conflicts don't really flare up and actually die down a bit, and if the energy crisis (and general commodities crisis) can be averted with alternate fuels and worldwide conservation, and global warming doesn't bite too badly, then I suppose global markets might see decent returns. But seeing worldwide real returns of 7%/year over 30 years means an 8-fold increase in stock values -- and if P/E ratios and turnover ratios remain the same, this means an 8-fold increase in real world production. Sounds like science fiction to me. I don't trust the chorus of people with a vested interest in me investing my $ with them to be telling me what they really think is going to happen in the future.

So, I'm pessimistic. What else can one do?

- pay off mortgages -- I used to think this was dumb advice but now it seems like a reasonable return, especially because you have to treat the 6% or whatever as a risk free return.

- Global is right.

- Hedge inflation - when a country's debt grows as large as ours is - and will become - there are three solutions: default on the debt, raise taxes a whole lot, cut services a whole lot, or inflate away the debt/print money. Politicians throughout history have figured out that the last is their path of least resistance. So, buy TIPS, maybe more gold or other hard assets. (Maybe once the real estate bubble popping is done, that would be a good place to park $).

- Don't plan on too cushy a retirement. Just set up and invest in infrastructure that lowers your own cost of living -- energy efficient homes and cars, learn to fix things, buy some good quality tools, have enough that you love near where you live so that you don't have to take vacations to get away from it all, etc.

- Help get Obama elected so that all the potential facilitators of future growth I mentioned above are more likely to occur.

[sknabt]

20. Over the past 80 years

What did you say your investment horizon is? ;)

[KharmaTrain]

19. 10? I Was Promised 20%...

Two years ago, I was being pitched on a bond fund...loaded with all sorts of bank stocks, European and Asian currencies. The bank rep claimed it would bring in 20% returns...bringing out the "historical chart"...I grabbed my pocketbook. I made him a bet, that this fund would be lucky to get 10%...if it was more than 10% I'd owe him lunch if it was under, the bank takes me to dinner at the place of my choosing. A couple weeks ago, I ran into my "buddy"...we went and looked at the fund...in two years it had gained about 4% the first year and lost 5% in the past year. I'm still waiting on my dinner. I have a feeling I'll be waiting for a while.

[MadMaddie]

3. No matter how much propping up of Fannie Mae and Freddie

Mac they do.....they are destined to fail because they are not going to change any of their practices. This is another boondoggle for the American Taxpayer.....

[alfredo]

4. It's bouncing around like a Republican at a Hooker convention.

[Muttocracy]

5. there was something on the radio about oil spiking up due to unrest somewhere

is that's what is behind it? I was vacuuming at the time so only heard part of the story!

[malaise]

6. Not sure but I do know that Pakistan is about to descend

into chaos with the call for the impeachment of Mushie.

Bush sure has nice friends
http://news.bbc.co.uk/2/hi/south_asia/7547300.stm

[Historic NY]

11. oil pipeline fire in Turkey

http://money.aol.com/news/articles/_a/bbdp/oil-prices-rise-after-turkish-pipeline/116684

[Muttocracy]

12. that sounds like what I heard - that and bits of civil war in Georgia. nt

[malaise]

17. Thanks for this n/t

[Historic NY]

21. Followup no effect on pricing

http://rawstory.com/news/2008/Oil_prices_slide_beneath_116__0808.html

Oil prices slide beneath $116 Agence France-Presse
Published: Friday August 8, 2008
LONDON (AFP) - Crude prices slumped below 116 dollars a barrel on Friday as the market shrugged off confirmation that separatist Kurdish rebels were behind a blast that has cut a strategic oil pipeline in Turkey.

Brent North Sea crude for September delivery shed 1.91 dollars to 115.99 dollars per barrel in electronic deals.

New York's main contract, light sweet crude for September delivery dropped 1.73 dollars to 118.29 dollars a barrel.

The Baku-Tbilisi-Ceyhan (BTC) pipeline at Refahiye in eastern Turkey has been on fire since the blast on Tuesday and was expected to be closed for about two weeks.

The separatist Kurdistan Workers' Party (PKK) said on Friday that the explosion was "an act of sabotage" by its militants, according to a report on the website of the Firat news agency which is close to the rebels.

[MercutioATC]

7. Yes, but it was up that much between Tuesday and Wednesday.

All it did today was give back the last 2 days' gain.

[PA Democrat]

9. I think that this would be a good time to remind voters that the Republicans, including McCain

wanted to privatize Social Security. McCain can deny he was in favor of privatization all he wants but he has been caught on You Tube lauding privatization.

http://www.youtube.com/watch?v=FyBwMy27Aoc

Sucks to be McCain and be so clueless about the internets.

[Clear Blue Sky]

10. Wasn't it up 300+ points earlier this week?

[Crabby Appleton]

16. yes nt

[Gabi Hayes]

15. sure have, and the only 'large' stock holding I have has gone from about 76 two months ago

to 61

I'm REALLY screwed, cause I have to cash out a bunch of it to pay the IRS

[Supersedeas]

18. all smiles from the powder faced Biz chicks

[cherokeeprogressive]

23. Hmmm. Up 237 at 10am PST. Oil down.

Guess the BBC was wrong huh?

[Common Sense Party]

25. Up over 300 now. Oil down around $117/barrel.

The sky is falling. The sky is falling.