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Joss Whedon recently lost money on stock, you probably did too!
The Green Eyed Monster
i blame hip hopRegistered User regular
i blame hip hopRegistered User regular
The Wall Street Journal reports that over the last 10 years, stocks have been the worst performing investment available.
So ... ahem ... free market what? Privatize who?
the WSJ wrote:Over the past 200 years, the stock market's steady upward march occasionally has been disrupted for long stretches, most recently during the Great Depression and the inflation-plagued 1970s. The current market turmoil suggests that we may be in another lost decade.
The stock market is trading right where it was nine years ago. Stocks, long touted as the best investment for the long term, have been one of the worst investments over the nine-year period, trounced even by lowly Treasury bonds.
The Standard & Poor's 500-stock index, the basis for about half of the $1 trillion invested in U.S. index funds, finished at 1352.99 on Tuesday, below the 1362.80 it hit in April 1999. When dividends and inflation are factored into returns, the S&P 500 has risen an average of just 1.3% a year over the past 10 years, well below the historical norm, according to Morningstar Inc. For the past nine years, it has fallen 0.37% a year, and for the past eight, it is off 1.4% a year. In light of the current wobbly market, some economists and market analysts worry that the era of disappointing returns may not be over.
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Over the past nine years, the S&P 500 is the worst-performing of nine different investment vehicles tracked by Morningstar, including commodities, real-estate investment trusts, gold and foreign stocks. Big U.S. stocks were outrun even by Treasury bonds, which historically perform much less well than stocks. Adjusted for inflation, Treasurys are up 4.7% a year over the past nine years, and up 5.8% a year since the March 2000 stock peak. An index of commodities has shown about twice the annual gains of bonds, as have real-estate investment trusts.
So ... ahem ... free market what? Privatize who?
The Green Eyed Monster on
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I wonder how much the current bust is gonna drop it back down?
And read the article a bit better. They never suggest stocks aren't the best long-term investment for someone just planning for retirement and college funds for their kids twenty years from now. They simply show that the past decade, in terms of inflation-adjusted growth, has been essentially a "lost decade" in which basically nothing happened, but now means there is a long period of legitimate growth somewhere on the horizon. We've had periods like this, most notably during the Depression and then again during the 70s, but have always managed to pull out of it.
So then we can have a hypothetical someone like, let's say, my mother, or another hypothetical person, her son, who happen to need to tap investments during this ten year slump for things like school or retirement, and what? Just don't touch them? All that money you earned, saved, and looked forward to using during your retirement, or that money you were hoping to apply to your college degree ... well ... work and save another ten years, then pull it out, when it will hopefully, although to be honest we're not quite certain, be much more healthy. That's very fantastic advice, thank you.
The larger point, that I obviously didn't really put in the OP because I assumed most people would be able to extrapolate it, is that anybody who recommends we take public funds (think: social security) and invest it in the stock market are morons. Did you also read the part where an influx of investment leads to these bubbles, which is what happened in the late '90s? So sinking a ton of public funds into stocks, that's going to do what? Create another bubble which will have to correct itself. It's idiotic.
So from here on out, any charlatan coming to me and trying to say they understand the market and really know best and the best thing to do is to put things like social security into private investments, I'm going to consider an uninformed buffoon at best.
Any conservative investment plan involving stocks is still going to kick ass over the effective ROI of SS over a 40 year period. Stocks today as compared to 40 years ago are worth a fuckload more. Even if you pick a 40 year period that contains the entirety of the Great Depression, stocks outperform the effective ROI of SS by a comfortable margin. Which is sort of the point. Yeah, this last 10 year period sucked. The 40 year period that ended with this 10 year period rocked, though, and nobody works for 10 years and then retires unless they become insanely wealthy.
Beyond that, investment plans focus more heavily on low-risk things like bonds the closer you get to retirement. For the past 5-10 years of most 401ks, you start hauling all your funds out of stocks.
So no, this recent event doesn't mean shit as regards converting SS to private investment.
The stock market is for long term investing (those trying to make a quick buck usually lose money) and in the long term no other investment has outperformed stocks.