Harry Dent is founder and chief executive of Tampa, Fla.-based HS Dent Investment Management LLC. He is a best-selling author and money manager who has developed quantitative investment models based on demographic research.

He took time on Tuesday to discuss his latest views on the market with IndexUniverse.com Editor Murray Coleman. They also discussed Dent's new exchange-traded fund, the AdvisorShares Dent Tactical ETF (NYSEArca: DENT). It's scheduled to begin trading on Wednesday. Below are excerpts of that conversation.

IU.com: You’re fairly pessimistic about the market now, aren’t you?

Dent: We do think we’re at the end of this rally. This isn’t like past recessions. Consumer spending by baby boomers is peaking. It’s the end of a long surge that began in the 1980s. Clearly, baby boomers are going to start saving more and spending less over the next decade. That’s going to deflate the whole economy. The next generation should start to pick up consumer spending levels again -- roughly around 2020. That’s when we’re expecting the start of another long-term boom.

IU.com: In the meantime, do you see many short-term opportunities for investors?

Dent: Right now, we’re still seeing a lot of hope priced into stocks for a prolonged recovery. But in 2010, we think markets are going to start falling again and people will become very disappointed. Our expectation is that stocks are heading towards an extended period, which will be marked largely by downturns and sideways movements. From late 2010 through around 2020, we’re expecting stock markets around the world to remain in a trading range with a lot of volatility. We’re expecting the S&P 500 to show a lot of ups and downs over the next decade, moving anywhere from around 300 to 1,100 as markets remain in flux throughout the period.

IU.com: That’s quite a range, isn’t it?

Dent: Yes, that is. The point is that we’re going to see a lot of volatility in the next 10 years. Under these conditions, we think you’ve got to play momentum – there’s not going to be another prolonged boom for awhile. But we do expect some markets to do better than others. When times are better, we expect places like India to roar a little more than most developed markets. Emerging markets, though, will remain extremely volatile. Eventually, somewhere around 2020, I can see us coming out with another ETF that plays strictly in emerging markets. But in the shorter-term, emerging markets are still very dependent on developed markets. And Europe, as well as Japan, are practically dead at this point for investors looking for the best relative growth opportunities.

You’ve also got to remember that emerging markets have just been through one of the biggest bubbles in the past several years. So, there’s going to be a shakeout in the shorter-term in Asia and Latin America. The positive is that even in a sideways-moving global market, emerging markets will see bigger bounces than developed markets. Our model for the new ETF will likely lean towards countries like China and India and other emerging markets when momentum is moving up. We feel like that’s how you’ve got to play global markets in the next decade – with a lot of flexibility to take advantage of movements up while remaining cautious on the downside.

IU.com: In your latest book, you show different demographic trends favoring emerging markets over the next several years, don’t you?

Dent: The strongest demographic trends – countries with growing workforces and growing consumer patterns – are going to be in the emerging markets. Latin America and much of Asia is largely urbanized: India is a little over 30 percent; China is just under 50 percent but Brazil is over 80 percent. So, emerging markets' growth is very tied to this move towards greater urbanization.

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