This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Five Trends Investors Must Watch

The short-term direction of this stock market and economy remains wrapped in a fog. There simply isn't enough data to say if the rally will run another couple of months or melt in the August heat, let alone predict whether the much-anticipated economic recovery will kick in during September, October or next year.

(My own view is that after an August-September drift lower, stocks will move ahead in the last quarter as the rally resumes on hopes for the fourth quarter.)

In contrast, the long-term picture is remarkably clear. The trends that will have the most influence on the financial markets over the next 10 years are already in place. The way they'll work out certainly isn't preordained, but investors can pretty easily identify the forces that will shape the future.

And those trends -- I'll spell out the big five in this column -- say the investing world will be radically different 10 years from now and probably much more challenging. And woe to investors who think all they have to do to position their portfolios for future years is to follow past strategies and tactics.

A Leveraged World

Where better to start than by looking at the forces set in motion by Federal Reserve Chairman Alan Greenspan? Like it or not, he's the most powerful financial and economic figure in the world. In his efforts to smooth out the swings in the business cycle and to limit the damage inflicted by risk-takers who get their bets wrong, Greenspan is presiding over a huge increase in global leverage. It didn't start yesterday, and it won't unwind tomorrow. Unwind it will, however, and when it does, investors should be ready.

We're all familiar with part of this leverage, the part that shows the U.S. consumer taking on ever-increasing amounts of debt. Total consumer debt, which does not include home mortgages, stood at $1.32 trillion in 1998, according to the Fed. By May 2003 the total was up to $1.76 trillion. That's a 33% increase.

Mortgage debt has more than kept pace. Mortgage debt climbed 12.4% in the U.S. last year. The five-year increase is about 60%.

1 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,960.57 -123.23 -0.72%
S&P 500 1,978.34 -9.64 -0.48%
NASDAQ 4,449.5640 -22.5440 -0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs