How to invest over the next few years, according to Harry S Dent

A further search in Harry S Dent revealed the following:
1.Dow will Rebound to 10,000 – 13,200 within 6 Months (this is proving to be true)
A likely massive stimulus plan will bolster the economy somewhat into 2009 for a likely rebound in the Dow to between 10,000 and 13,200. A projected bullish scenario puts the Dow between 12,000 and 13,200 between April and September 2009 if the Treasury rescue plan takes hold with the markets anticipating a recovery. A projected bearish scenario assumes that if the recovery is at best rocky, or at worst that we were to move more into a depression in 2009 than a serious recession, that the Dow would only get back to 10,000 to 11,000 and not last as long.

Update at 12 Oct 2009: Dow now at 9,864.
'Look for the Dow to rise again to between 9,650 and 10,400 by July or possibly a bit later, and possibly as high as 11,300. And then? Then expect a second devastating crash. It will bottom in late 2010 or so, around 3,800 on the Dow, possibly as low as 1,800 – 2,200 ultimately. You’ll see sideways movements in the stock market into mid-2012, and finally . . . signs of the first real recovery: between mid-2012 and mid-2017. . . . after the deleveraging of the banking system is more complete. This generation may never again see a Dow at 14,280.'



2.Oil will Increase to $180 – $215+ by 2010 and then Decline to $40 - $60 by therafter

Update: Oil now only at $71.

3.Commodities will Peak between 2009 and mid-2010

Update: Commodities are riding high, local counters such as Noble and Wilmar making new highs.

4.Dow will Fall to 3,800 – 4,500 by 2012
The next accelerated stock crash, led by emerging markets, Asian stocks, financial stocks and tech stocks – and finally by oil and commodity stocks - will likely occur between mid- to late 2009 and late 2010, when most of the damage will occur, and continue off and on into mid- to late 2012. The Dow will fall at least to 4,500 and more likely as low as 3,800 by mid-2012, the 1994 low where the stock market bubble first began.

5. Market will Rally from 2012 until 2017

6. Economy will be in a Depression by 2011

7. Unemployment could Increase to 12 – 15% by 2011

8. Inflation will Increase until mid- 2010 and then turn to Deflation
Update: No sign of inflation yet.

9. Interest Rates will Increase
Update: No sign of increase in interest rate.

10. U.S. Dollar will Decline
Update: US $ making new lows.

11.Housing will Decline by 40 – 60% from Today’s Levels

12.Greatest Economic and Banking Crisis since the 1930s will Occur Between 2010 and 2012

Dent concludes by saying “If you thought 2008 was scary, 2010 to 2012 will be the greatest economic and banking crisis since the 1930s. You must be prepared in advance to survive this most difficult season. Do not accept the proposition that you cannot, or should not, take steps to guard against losses. As an investor, it is your money, your future, and your responsibility to protect yourself in the best way possible and there will be the greatest reward for those who do prepare during this once-in-a-lifetime ‘great sale’ in financial assets.”

How Best to Invest and Prosper during the Tumultuous Times Ahead (according to Dent)
1. Early to mid 2009:
a) Sell stocks, except commodity and energy sectors.
b) Allocate between commodities and T-bills or money markets and /or safe currencies.

2. Late 2009 to mid-2010:
a) Sell commodities and commodities and energy stocks.
b) Allocate 100% to T-bills or money markets and safe currencies.

3. Mid- to late 2010:
Start to allocate to 30-year Treasury bonds only after their yield begins to spike.

4. Late 2010 to mid- 2011:
a) Allocate to 20-year corporate bonds when yields go to extremes.
b) More conservative investors should focus on AAA corporate, more aggressive investors toward BAA.
c) All investors must recognize, however, that even high-quality bonds will be in question as to their viability, given that the downturn between mid-2009 and 2012 is anticipated to be more extreme than anything we have seen since the early 1930s, mid-1970s, or early 1980s.

5. Mid-2011 to mid-2012:
Allocate to long-term municipal bonds when yields seem to be peaking (high-tax-bracket investors).

6. Mid- to late 2012:
a) Aggressive/growth investors: allocate majority into Asian stocks and lesser into U.S. multinational, technology and health care, with minor allocation in long-term corporate, Treasury, or municipal bonds.
b) Conservative investors: focus largely on 10- to 30-year Treasuries and 20-year corporate AAA bonds, with minor allocations in multinational, health-care, and Japanese stocks.

7. Late 2011 to early 2015:
Look for selected opportunities in real estate (small condos and starter homes early on; vacation and retirement homes later; trade-up homes by 2015).

8. Mid- to late 2014:
Aggressive/growth investors: allocate more to leading stock sectors such as China, India, health care, multinational, technology, and financials on a likely short-term correction between late 2013 and late 2014.

9. Early to mid-2017:
a) Sell stocks in all sectors.
b) Convert largely back into long-term bonds and, to a lesser degree, into T-bills or money markets.