Here's what I see in my crystal ball
"What ifs?" about the stock market and teleportation
Imagine flying cars, personal robot assistants, Mars colonization and, heck, even teleportation. Well, I don’t think we’ll be having any of those in 10 years. I do think we’ll have a great economy and stock market, though.
This article is one big “what if” musing. Yet these notions are rooted in history, credible projections and widely accepted cycles. Some may be accurate and others off-base. I tried to look in the rear-view mirror and the crystal ball. Let’s talk in 10 years and see how wrong, or right, I was.
TWO IS THE MAGIC NUMBER
In the next decade, we’ll probably experience two full business cycles, two (or three) recessions, and two more presidential elections and Olympics Games.
U.S. POPULATION INCREASES BY 25 MILLION
This isn’t too far-fetched. The data comes from Census Population Projections. They figure we’ll be at about 349.8 million citizens by 2026. That’s an increase of about eight percent. Not huge but better than countries sliding down the scale. This will be 25 million new consumers, taxpayers, householders and workers. This is healthy for a growing economy.
OUR ECONOMY COULD BE 34 PERCENT HIGHER
I ran across estimates by the International Monetary Fund. They said, by 2021, the U.S. economy would be more than $22 trillion dollars. Then I projected reasonable growth at two percent a year. That would make us a $25.1 trillion juggernaut in ten years.
In the last few years I’ve been saying that I’m finally optimistic about the markets. We don’t have a tech bubble or a housing bubble. We don’t have inflated commodity prices. Well, not too inflated. We don’t have any major over-speculation. All I see now is a lot of government debt and low interest rates. Those are usually manageable.
Also, we’re exiting the worst full-decade stock performance in the history of the U.S. markets. We’re experiencing stable, non-bubbly economic growth. Things are returning to normal. The outlook is genuinely sunny and clear.
With that in mind, let’s project where the Dow Jones average could be. We’re at about 18,600 in mid-August. If we compound at a below-average rate of 7 percent, that puts the DJIA at 36,500 at the end of 2026.
Take a breath. I know that’s a big number. Here’s an even bigger one:
DOW JONES AT 44,000!
I had to emphasize that. After all, what if I’m right?
That would be the 2026 Dow Jones price with 9 percent compounded growth. Of course, we’ll experience the business cycle and the resulting recessions along the way. That means lots of ups and downs and bumps and bruises. Nothing in the market is ever a straight line.
But what if…?