Interesting article and video on a prediction that the DOW will reach 38,000 by the year 2025.
While it may sound wildly absurd right now, you have to remember that we're talking 24 years away! And based on the DOW today (11,170), we're only talking roughly a 400 per cent increase (invest a dollar today and in 2025 it will be worth 4 dollars - but actually you'll get a lot more).
You have to remember that gains don't come all at once, they compound - that 400 per cent accrues over 24 years. So you invest a dollar today, then in eight years it's worth two dollars. In another eight years it's worth 4 dollars and in another eight years it's worth 8 dollars - which is actually a 800 per cent return, not a 400 per cent return (even though the markets themselves would have risen 400 per cent).
Despite the disaster we've lived through since 2008, the market is still the best place to be long term. To put it in perspective, if you invested 10,000 this year and the DOW did reach 38,000 by 2025 - that 10,000 would be worth somewhere in the neighbourhood of 80,000 dollars. Now if you invested 10,000 a year over the next 24 years, you'd have invested 240,000, but the compounding returns over that period would probably put your net worth somewhere in the neighbourhood of 1.5 - 2.5 million.
Anyway, what I found funny from a PR perspective about this article was the term 'Super Boom' - which is basically hyperbole, because DOW 38,000 claim is anything but a 'Super Boom', it's actually nothing more than a 7-8 per cent return annually (and that's off an artificial low created by the crash), which is perfectly in line with past market trends.
A 'Super Boom' would be something like DOW 60,000 - and to be honest I could see something like that happening. With countries like China and India developing middle classes, there will be millions (perhaps even billions) of new investors entering the market and bidding share prices higher over the next few decades.
'Super Boom' is a catchy headline, and I'm glad to see us starting to look out in to the future with optimism again, but from a PR perspective the story is a bit misleading. The headline should have read "DOW 38,000 by 2025 - a return to normality." But I guess that wouldn't catch people's attention the same way 'Super Boom' does.
While it may sound wildly absurd right now, you have to remember that we're talking 24 years away! And based on the DOW today (11,170), we're only talking roughly a 400 per cent increase (invest a dollar today and in 2025 it will be worth 4 dollars - but actually you'll get a lot more).
You have to remember that gains don't come all at once, they compound - that 400 per cent accrues over 24 years. So you invest a dollar today, then in eight years it's worth two dollars. In another eight years it's worth 4 dollars and in another eight years it's worth 8 dollars - which is actually a 800 per cent return, not a 400 per cent return (even though the markets themselves would have risen 400 per cent).
Anyway, what I found funny from a PR perspective about this article was the term 'Super Boom' - which is basically hyperbole, because DOW 38,000 claim is anything but a 'Super Boom', it's actually nothing more than a 7-8 per cent return annually (and that's off an artificial low created by the crash), which is perfectly in line with past market trends.
A 'Super Boom' would be something like DOW 60,000 - and to be honest I could see something like that happening. With countries like China and India developing middle classes, there will be millions (perhaps even billions) of new investors entering the market and bidding share prices higher over the next few decades.
'Super Boom' is a catchy headline, and I'm glad to see us starting to look out in to the future with optimism again, but from a PR perspective the story is a bit misleading. The headline should have read "DOW 38,000 by 2025 - a return to normality." But I guess that wouldn't catch people's attention the same way 'Super Boom' does.
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