This IS your father's stock market.

This stock market is indeed your father's, or in some cases your grandfather's stock market.  We are believers of the generational theory that history repeats or at least rhymes.  As in generations are human and repeat the same mistakes on a regular basis once they get far enough away from remembering the perils of those mistakes.  The generational theory we like best was penned by Howe and Stauss back in the early 1990's.  They made famous the 80 year cycle that works best for us. If you are not familiar with their work go get their original book entitled Generations 1584 to 2069 it will give you the concept. They have wrote several books since then and one of them does a online blog now.  Oh, if you think this stuff is crackpot trust us here people as diverse as Obama to Gingrich have read these books and apply them to their thinking and policies.  It IS worth your at least getting some understanding if you want to be up to grade in knowledge.  Rahm Emanuel used the concepts of Strauss and Howe to run the Obama White House while he was there.  Remember never letting a good crisis go to waste? 

Anyway using the 80 year cycle idea brings us to the 1929 and 2009 financial crashes, see how this works.  The market responded similarly each time to the mistakes of political financial policy and we have as a nation reacted with new policies tightening regulation each time.  We loosened too much in the 1990's and we have tightened too much starting in 2009.  Go back to the 1920's and 1930's and you will see similar loosening the tightening.  Now each time the last decades prior to the financial crisis were only the finishing off of such policy moves and ended in a crescendo. 

So taking that we are now in the mid 1930's cycle again one can expect the stock market to behave like it did then.  Little up and little down and a economy so restricted by financial engineering and political fiscal policies there is little growth, few real jobs, and only the big boys make real profits. Ditto 1930's and 2010's.  So what are we to expect going forward?  Simply put much more of the same.  We have opined that the underpinning support of the stock market in a Herculean effort to keep it from crashing makes that almost impossible and we have been investing accordingly. Also note the same impact regulations had on invested assets during the 1930's and 1940's is being repeated today in the form of such legislation as Obamacare.  Obamacare is killing small business, but helping big corporations who can mitigate the harmful effects via political muscle and sheer size.  If history repeats this could go on until 1947 or so or in our time well into the mid 2020's.   If history repeats Hillary Clinton will be your next president. If history repeats she will be followed by a Generation Xer sans Truman.  Think a Paul Ryan type.  

So smart investors who use this rhyming of history will purchase mega cap stocks and hold on for a decade plus now. Obviously being in touch with any change in the scenario, like Clinton NOT winning in 2016, and continuing these same policies of Obama.  Yes, as we have said job seekers and upward movement in careers will be keep at bay with an economy restricted so much by policy there is little economic growth, which will be continued in a Clinton President.  The rich got richer in the 1930's and 1940's, but smart young people not only saved, but they also invested in stocks.  Few did then, few do now. Jobs were hard to find in the 1930's as in our time as well. 

So take a read of the book and do some research on your own.  In the end do your own decision making for investing.  In our case we will continue to believe mega cap investing and stable prices are here for awhile. 

The real fear I have is the uncertainty of a war like 1941 repeating in 2021.  Yes, that is out there, but it has happened in 80 year cycles going back to the Civil War and the Revolutionary War.  Think about that one for awhile too.