Home > Economy > Stock Market Record! Congrats- You’re Back to Zero!

Stock Market Record! Congrats- You’re Back to Zero!

Graph UP
A lot of happy headlines today as the Dow Jones Industrial Average climbs to heights never before seen. I checked my retirement accounts and I am, indeed, doing nicely. But compared to what?

Compared to 5 and half years ago- we’re now back to where we started. Compared to ten years ago, stocks have averaged only a .6% increase in value. And for giddy investors there’s always this helpful MarketWatch headline: Legendary Hedge-Fund Manager: This Will End Badly.

What are the markets so exuberant about anyway? Unemployment at 8%? Adjusted for inflation, your take-home pay buys 8% less than it did in 2007. Last time we hit record highs on Wall Street your home was worth 26% more than it is today and that’s counting a recent housing rebound. Some 14 million homeowners still have property that’s worth less today than when they bought it. Mark Gongloff has all the stats in this piece in the Huffington Post.

Perhaps the markets are responding enthusiastically to that newfound spirit of compromise on Capitol Hill? Oh- that’s right, we’re still careening from one manufactured budget crisis to the next.

All these reasons for the stock market not to be happy worry me. It’s a nice fantasyland if you’re lucky enough to have a 401k or an IRA- but if you don’t- this little roller coaster ride means nothing except that a bunch of rich people are doing better than you…and even at that- they’re only standing still.

Hate to be the skunk at the garden party, as they say. And I’ll take the rally since the alternative really sucks. But careful out there…irrational exuberance has bitten us in the derriere before.

  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: