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THE UPWAVE IS COMING
Today, we are in the early stages of an upwave; a period of general prosperity that is likely to last into the third decade of the new millennium. There will still be economic downturns, but they will be surprisingly short. As we turn to the new millennium, the U.S. has been moving through its ninth year of economic expansion. Though slower than it once was, and potentially disrupted temporarily by year-2000 computer problems, this has been the longest peacetime expansion in the postwar period. Even in a long cycle upwave, there will still be volatility, often dramatic volatility, but selloffs in stocks and bonds should be seen as buying opportunities; the bigger the selloff, the bigger the opportunity. An example of the kind of volatility we are likely to see is the 1987 stock market crash in the U.S. Within two years, stocks were back up to record levels, and that was in a downwave.
The general trend over the next twenty-five years will be up. Not everyone will win. Not every company will win. The new, innovative economy will show enormous growth, but obsolete uncompetitive businesses will die. Creative destruction will be evident in robust and growing economies. If governments attempt to protect declining industries, the process of change will slow for everyone. Painful as it is, the obsolete or uncompetitive must give way to the new. But certainly not all old companies are obsolete. Many are reinventing themselves, innovating, investing in technology, improving customer service, product design and delivery. These too will flourish.
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