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☯ Severe Recession Alert: The TSP Indicator is showing a strong signal and possible severe recession approaching...
(11-06-2019, 12:50 PM)CrypticMole Wrote:
(11-06-2019, 12:31 PM)Lily Wrote: Morgan Stanley issued a warning:

Morgan Stanley is cautioning investors that returns on a traditional investment portfolio made up of 60% stocks and 40% bonds could slide to century lows over the next decade.

The firm expects the annual return on a traditional 60/40 portfolio to fall to 2.8% over the next decade.

A combination of low growth, tempered inflation expectations, and falling yields could hamper upside, according to Morgan Stanley analysts.


The figure is based on the S&P 500 gaining about 4.9% annually and 10-year Treasuries yielding 2.1% over the next 10 years.

"The return outlook over the next decade is sobering – investors face a lower and flatter frontier compared to prior decades," the firm wrote in a note to clients Sunday. "Investors will need to accept much higher volatility to eke out small incremental units of return."

Morgan Stanley's analysts pointed to low growth prospects, weak inflation, and sliding yields as the primary drivers for muted returns.

"US equities expected returns are dragged down by a combination of lower income return, low inflation expectations and penalties on both higher-than-average valuations and above-trend growth that cannot be sustained for the next decade," the analysts added.

The firm also expects investors to shift capital out of high-yield bonds and into investment-grade credit as returns continue to slump.
https://markets.businessinsider.com/news...1028656825

***** IMO this is a cover their ass. When investors start screaming about losing money, Morgan Stanley can reply, "we told you it was coming"

When they are talking about lower and weaker inflation, use caution. I've already warned bout the coming rising inflation that will be coming. It will come in different sectors and at different times sometimes almost seeming like deflation like falling real estate prices which can happen during a buyers market and when there are more properties for sale then there are buyers. The sellers reduce their prices to sell. It has nothing to do with inflation or deflation. It has to do with greed and asking high prices when selling. Now everyone is selling and there are not enough buyers. Prices fall sharply.

It is refreshing to see someone who understands the results of putting too much money
into the system. Especially when it is only backed up by faith and trust.
The inflation/deflation is a shell game played on the ignorant by the clever. The items
you must have or need the most will increase painfully. Think of food, water, gas for
your buggy, mandatory insurance policies, soap, and small appliances. The items you
like, but don't always need, will go wild. Think real estate, homes, new cars ( used ones
will go up from demand). Yeah, health care costs will not be cut because you are hurting
for money. Nor will college tuition prices. Bet they go up until they have to close.

Here is the kicker. The government figures most of their inflation on the items YOU DON'T
really need. So, if you don't eat or drink or want to drive somewhere or stay warm in the
Winter- no problem. Inflation is super low!

The other pain to come is that stinking Bank in Germany. I'm not going to put a link
here as there is a separate thread on The Fringe ( few give a rat's butt concerning the
topic anyway). I hear talk they have filed for Bankruptcy. But then I have heard for
many months there are one or two banks in the USA in deep financial trouble.

CrypticMole, Lily  likes this!
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(11-06-2019, 12:50 PM)CrypticMole Wrote:
(11-06-2019, 12:31 PM)Lily Wrote: Morgan Stanley issued a warning:

Morgan Stanley is cautioning investors that returns on a traditional investment portfolio made up of 60% stocks and 40% bonds could slide to century lows over the next decade.

The firm expects the annual return on a traditional 60/40 portfolio to fall to 2.8% over the next decade.

A combination of low growth, tempered inflation expectations, and falling yields could hamper upside, according to Morgan Stanley analysts.


The figure is based on the S&P 500 gaining about 4.9% annually and 10-year Treasuries yielding 2.1% over the next 10 years.

"The return outlook over the next decade is sobering – investors face a lower and flatter frontier compared to prior decades," the firm wrote in a note to clients Sunday. "Investors will need to accept much higher volatility to eke out small incremental units of return."

Morgan Stanley's analysts pointed to low growth prospects, weak inflation, and sliding yields as the primary drivers for muted returns.

"US equities expected returns are dragged down by a combination of lower income return, low inflation expectations and penalties on both higher-than-average valuations and above-trend growth that cannot be sustained for the next decade," the analysts added.

The firm also expects investors to shift capital out of high-yield bonds and into investment-grade credit as returns continue to slump.
https://markets.businessinsider.com/news...1028656825

***** IMO this is a cover their ass. When investors start screaming about losing money, Morgan Stanley can reply, "we told you it was coming"

When they are talking about lower and weaker inflation, use caution. I've already warned bout the coming rising inflation that will be coming. It will come in different sectors and at different times sometimes almost seeming like deflation like falling real estate prices which can happen during a buyers market and when there are more properties for sale then there are buyers. The sellers reduce their prices to sell. It has nothing to do with inflation or deflation. It has to do with greed and asking high prices when selling. Now everyone is selling and there are not enough buyers. Prices fall sharply. Deflation? I think not!
I think the real estate market is stabilizing to real value. Most people in the metro area here are pre-qualified for home loans in the 350,000 and below. The majority of homes are $400,000. How can they expect to sell homes if wages are not in line with costs? I have been sitting and waiting for two years for home prices to drop.
BadBrad, CrypticMole  likes this!
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