I believe income investing is even more important when you take a look at the future of the stock markets over the next ten years or so.
If you depend on the markets to rise in price, you may be as severely disappointed by your portfolio's performance in the next ten years as you should be by its performance over the past ten years.
In a way, I feel reluctant to write this, because I believe the markets are unpredictable. I certainly would not begin to hazard whether the Dow Jones and S&P; 500 indexes will end up higher or lower tomorrow than they did today.
However, over time the market goes up or down based on certain conditions. While they can never be perfectly predicted, we can see them coming.
Dark Clouds Over the Stock Markets of the World
1. In Europe and the United States, the baby boomer generation is approaching retirement age.
2. Europe, the United States and Japan have trillions of dollars of unfunded obligations to senior citizens: pensions, Social Security, Medicare, healthcare reform and equivalent programs (many more generous) in other countries.
3. Inflation or deflation
4. The rising cost of energy
5. Continued military and political instability despite rising prosperity
Who Picked Up Woodstock After the Hippies Went Home?
The baby boomers have already begun to retire. Tens of millions more are drawing closer every day. Not only will they strain the Social Security systems, they likely sell off growth stocks to pay for their fun and medical bills. But who's going to buy them?
When Only Half the Population Works, Who'll Pay the Taxes for the Rest?
The numbers are just too big to comprehend. Based on demographic statistics and the amount of health care the elderly and disabled will need as the years go by, we're headed for a country where the young do nothing but work to pay taxes to support the elderly. And most of those young are working in the geriatric medical field. How will we advance in other technology?
U.S. Dollar, Euro or Other World Currency Crashes
If even some of the banks and government treasuries around the world holding U.S. dollars were to start selling them, the dollar could collapse into an inflation that would make the early 80s seem tame. And that's before the huge influx of dollars that'll be created by President Obama's deficit spending in the next few years.
However, some experts believe we're more at risk from deflation, thanks to the huge amount of debt in the economy -- including bad mortgages, government obligations and private company and consumer debt.
Get Ready for Higher Energy Bills
The world still has lots of energy, but getting it out of the ground is more expensive than ever. This is true of oil sands in Canada, coal in Wyoming, uranium in Australia and of course deep sea oil drilling rigs.
If the Red Shirts Can Riot in Thailand, No Place is Safe
Of all the developing countries of the world, the one that seemed the least likely to devolve into rioting and political chaos was Thailand. If the Thai government can't maintain order, where's the hope for The Philippines, let alone the Sudan? Or even Saudi Arabia?
Capitalism is a system based on competition, and so we should expect and celebrate the economic ambition of countries such as China, India and Brazil. We fought the Cold War against communism to give them the freedom to compete against us.
But there's too much potential for violence: terrorism, civil war in some countries, and aggression by others, for anyone to feel complacent.
Income investing cannot prevent or solve these problems. However, when the stock market goes nowhere -- as it has for the past eleven years and could for another ten or more years given the financial problems we're facing -- income investors receive cash dividends and interest they can spend or reinvest.
Author Information: You can start erecting a fortress around your financial portfolio. Click here to get the information you need to effectively make money from your investments whether the markets go up or down. If you're ready to discover how income investing can help you retire with financial security, visit this page, enter your email address into the form and click on the Submit Button. Then go to your inbox and verify that. It's free for the taking. http://www.incomeinvesthome.com/. cirtex hosting discount code
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