'lo Bert,

Anyone that believes that is bonkers.
...looks like you were right on that one...;-) :

We're doomed ... I've read the chicken bones.


However, you then say:
But 10% is quite possible.
I really do think that the equity market is living in some sort of backwards-facing dreamland at present. It seems to me that it is only now [in the UK at least] that the real economy is starting to feel the impact of the credit crunch, with purchases being deferred and mortgages difficult to obtain. My builder this morning was complaining that enquiries had fallen off a cliff in the last few weeks and telling of a client who had just been refused a £160k mortgage on a £460k property, despite putting up £300k of equity [apparently he'd missed a single mortgage payment a couple of years ago, thereby giving the bank a reason not to lend]. This all takes time to build up. My own view is that it will take a very long time to work through to a sensible bottom [see comments in http://boards.fool.co.uk/Message.asp?mid=10991525 ] and, though there will be a lot of rallies on the way, none of them will endure for very long. Accordingly, I can easily see a scenario where shares grind lower year after year but at a pretty modest rate........supposing, though, that UK shares fall at an average of about 10% a year for the next 4 years [having already fallen 15% in the last 6 months], then that would take the FTSE100 down to around 3,740.....which would be a fall of about 44% in total from the 2007 highs.

To think that it will be much less than that seems to me to imply that we'll see a sharp turnaround in confidence in the near future........but I don't see what is going to stimulate that. Indeed it seems to me that uncertainty and lack of confidence are only likely to increase in the medium term, especially with elections due in the US and UK in the next couple of years. Both have lame duck administrations desperately trying to keep their economies from falling apart before the electorate make their decisions....and I don't think either will be able to make it work.

Anyway....we'll see. My pension fund is staying in cash for a good while yet.

rgds

ee