Where will the stock market be in 50 years time?

[Options2010]

Hi,

I am a young and new investor and I would like to know what your economic predictions are about the future. That is, what trends will we see, what sectors will soar etc.

I am looking to make some long term investments and want to know what I should invest in. Right now I'm thinking commodities and alternative energy sectors since these will probably be the big sectors of the future as the world is very dependent on materials which will only be depleted over the long term.

And please answer this question for me:

If you were to invest in some stocks now and hold them for the next few decades, what would they be?

Thank you.

 

[moreld]

Hi Options2010
It's fantastic to see a young investor thinking about the long term, really fantastic. Here are some general thoughts:
Everything moves in cycles. Commodities are currently in an up cycle, but that will not last and I think it is pretty easy to argue this secular cycle for commodities is more than half over.
While alternative energy will be a big part of our future, picking any particular winner is difficult. Imagine yourself in the 1920s predicting that automobiles will be a big part of the future, you'd be right but picking any winner from the hundreds of manufacturers that existed or would exist would be hard.

So I recommend investing in sectors when they are clearly out of favour; surrounded by pessimism, controversy, complexity or fear to quote Bill Miller. Once you can buy on fear investing becomes easier, as you'll always be getting a large margin of safety, you don't need to pay attention to the market too much as when fear is high you'll read all about it in popular press.

For sectors like alt-e look at ETF rather than individual stocks.

As a youngster your savings will be a considerably more powerful factor in your wealth growth than share market market returns, so concentrate on maximising your savings by increasing your income and decreasing expenses.

Patience is the real key to investing. You have fifty years so need to rush.

Good luck on your journey
Dean

 

[webbrowan]

Unfortunately for the finance industry, nothing is really predictable at all especially within such a lengthy timespan of 50 years. Usually the finance situation gets predicted for a period of 5-10 years or so and even that could go fatally wrong depending on other contributing factors. Market patterns and trends can be observed but they do not determine any guaranteed situation.

 

[SilverRanger]

I would put my money on listed property trusts and property developers on Mars. The moon and earth by then is probably too overcrowded and way too expensive....

Seriously, 50 years?

 

[cynic]

Normally, I would confidently predict that the major indices would all be somewhere above zero. However, since the advent of NIRP, it seems that the number zero no longer enjoys the sanctified status it once held.