Lately, I've been wondering if the 8-10% expectations we've had is sustainable long term. If you think about it, stock prices are related to earnings. How can earnings of companies grow 10% each year if wages aren't growing (i.e. you need people to make more to be able to buy more products or pay higher prices). I don't think wages haven't been growing at 10%, but historically we've added another income (largely women entering the workforce and making larger salaries) and living on more credit.

If those two things were what lead to the big historical gains that may be a problem in the future. We aren't adding more incomes to our families and living on credit doesn't seem to be the option any more.

Lately, I've been wondering if the 8-10% expectations we've had is sustainable long term. If you think about it, stock prices are related to earnings. How can earnings of companies grow 10% each year if wages aren't growing (i.e. you need people to make more to be able to buy more products or pay higher prices). I don't think wages haven't been growing at 10%, but historically we've added another income (largely women entering the workforce and making larger salaries) and living on more credit.

If those two things were what lead to the big historical gains that may be a problem in the future. We aren't adding more incomes to our families and living on credit doesn't seem to be the option any more.

I prefer to invest in individual companies because I'd rather invest my money into great companies I understand (in my circle of competence) than invest in ALL companies, many of which are poorly managed or capitalized. I don't want 'average' market returns either… I invest in businesses, not the entire economy and will settle for the returns I get, which I think will be better than the overall economy… if not, so be it. At least I'm comfortable with my investments and with any drops or rises in their valuations. I know when the price goes down below a certain point, my company is undervalued, and when it goes above a certain point, its overvalued… So when the value goes down, many on Wall Street freak out, but I might be sitting there buying more shares in a PARTICULAR company that I know is being thrown out with the bath water… even if the economy has a grim outlook for a few years…

The real problem is the REAL rate of inflation in regards to your returns. Then taxes come into account afterwards.

If this crisis is anything like the depression it'll take about 18-20 years for your stocks to recover. On the bright side things that you buy during that time will be cheap and rise in value.

Of course it could all end up like Japan and just stay flat for years and years. Not every stock market in the world averages a positive return over the medium to long term.

You have the unfortunate luck of being whalloped by equities AND international because of the dollar strengthening (or should I say, other currencies weakening faster than we are)… yikes.

In 11 years I will be almost 75 years old.

I had planned to retire in a year or two. Now — assuming the rumors of layoffs at my employer's shop don't come to fruition — I likely will not retire. Ever. This situation has already left me totally screwed, and it's far from over.