12.22.2008 10:09 am
Your turn: Will bulls or bears rule the stock market?
St. Louis Post-Dispatch
The Dow Jones industrial average ended last week at 8,579. That’s down 39 percent since October of last year, which means we’re in a vicious bear market. But it’s also up 14 percent in the past month, so an optimist might say we’re in the early stages of a new bull market. Let’s see if the wisdom of crowds — in this case, the small crowd that reads Mound City Money — can be helpful at predicting the market’s course.
Loading …By the way, don’t forget to enter my Post-Dispatch Economic Challenge before Dec. 31. This post tells you how.
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
Again, I have to say that the question really isn’t appropriate, because it tends to legitimize the fool’s practice of predicting the short-term performance of a stock indicator rather than its probable long-term performance. In the short term (meaning, less than 5 years or so) it’s essentially unpredictable. In the long term, it’s up, but not by the same rate of growth in real (inflation-adjusted) terms as over the past 50 years or so.
The nominal increase in the price (as opposed to the real value) of stocks will almost certainly correlate with the growth of the money supply, as it has in the past.