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1. How do you think the economy is doing?
2. How do you think the stock market will do for the remainder of the year and into 2006?
3. Do you think the bull market is over?
4. Do you think the real estate market is in a bubble? Has that bubble ended?
5. What do you think about inflation? Have you noticed any inflation in things other than energy prices?
6. Have you made any lifestyle changes because of the rise in energy prices? Have you changed how you spend money or the kinds of activities you participate in on evenings and weekends?
I think the economy is fairly strong. The GDP rate is still above 3%, unemployment is low, and last time I went to Home Depot and Costco, folks are still standing in long lines buying stuff.
The stock market seems to be facing the wall of worry, as there is fear about energy prices, layoffs, pensions, war in Iraq, terrorism in the US, natural disasters, etc. But I think this pullback in the market is actually providing an opportunity for folks to get in or get more aggressive. I think we could see a rise in the markets (SP500) around 10% from these levels.
I don't think the bull market is over. But I do think the majority of gains were made in 2003.
The real estate market was in a bubble, and that bubble has popped. I don't know how low it will go, but I think when the economy does have the next pullback, we'll have a better idea. I think in order for there to be a collapse in the housing market, there would have to be some catalyst like skyrocketing unemployment. Something that would force folks to "sell at any price" to get out of their mortgages. As long as folks are employed and making monthly payments, I don't think prices will freefall.
Other than energy, I think prices for other things haven't gone up too much. Heck,seems like my grocery bill has gone down due to "competitive" pricing. My latest pair of shoes cost less than the last pair. Clothes seem about the same. My new computer cost less. The only thing I'm paying more for seems to be utilities. Energy, cable TV, water, trash, etc. Those things are monopolies, so I would never expect those things to come down in price.
I already do a combination of ride-sharing, mass transit, and working from home, so the rise in gas prices hasn't hit me much. I've been gambling less frequently and bringing my lunch to work more often, so maybe that's been the offset.