I think we might be entering a secular bear market. Which sucks for me (I'm long bias in my portfolio). And I'm generally bullish long term on equities, having been schooled on loss aversion, the equity risk premium puzzle, and a bunch of other academic crap. But I'm scared. American wealth is seriously declining. Forget the short term consumer confidence, I'm talking wealth over the next decade. Japan is still in a bear market with cyclical bull rallies. How did a 20 yr bear market persist? Well, when people's net worth got chopped in half after the commercial real estate bubble popped. If Commercial real estate starts to seriously correct (and its started to in the UK) we could be in for a lonnnnng bear market. In addition, we might end up in a liquidity trap, just like the Japanese. The tech crash was helped by the increase in house prices, and aided by Greenspan's interest rate cuts, increasing wealth. But if were aggressively cutting rates and assets are still deflating, the long term picture is pretty grim. Not to mention, corporate profit margins are coming off an all time high, and likely to revert to the mean. Anyhow, I think the value crowd is going to get killed, i.e. the time value of money will be neglected in holding "undervalued" positions. My plan? I'm investing in emerging markets where there's evidence of decoupling, and tons of inefficiency. I'm looking at markets where volatility is so high, the risk premiums have to be solid and I'm diversifying. I'm talking Vietnam, Thailand, South Africa. Countries where I expect to have massive drawdowns in individual positions, but where the net expected value is very high.... Anyhow, I think this sort of top down analysis will be necessary for a long portfolio. But I'm just a young dude...what do I know.