US Stock Market Investors Have Lost 20-30% Since 2000

“You can be sure if Wall Street is talking about a stock, it’s in your best interest to ignore it. My simple mantra is: you never make money buying the easy stocks that Wall Street buys.” Says Capital & Crisis’ Chris Mayer.

“You see, brokers and advisers tend to recommend stocks when they are 100% sure they are going up. It’s called momentum. They look for stocks that have been going up for a while, and hope they continue to go up. I would bet that 99% of advisers are incapable of thinking independently.

“By investing in so-called ‘momentum’ stocks, you’re missing out on significant gains. These ‘popular’ stocks have already seen their prices surge, and the rest of Wall Street is happy with the remaining measly returns.”

Since 2000, the feds did all they could to prevent a real correction. They gave consumers and speculators trillions of dollars’ worth of new money. The trouble with this money was the same trouble with the money coming out of the Central Bank of Zimbabwe – it didn’t represent real capital. It was just paper money. It had no real value.

You can’t get something for nothing, we said. But who cares what we say? The gush of liquidity soon had boats floating all over the planet – stocks, houses, planes, paintings – the great gaudy vessels were soon bumping into each other. Everyone was getting richer – or so they thought. And who could argue with them? People had more money…they could buy more things…what was the problem?

The problem was that the boom was phony…at least, mostly…and mostly in the West. It was an ersatz “Crack Up Boom” created by monetary inflation and speculation. It was easy come, easy go wealth…not the real thing.

And now here we are – beginning to see it more clearly. Last week, the US stock market suffered its worst week in five years. At the end of it, guess what? The S&P was actually BELOW its high set in January 2000. Adjust that for inflation and stock market investors – on average – have lost 20% to 30% of their money over the last seven and a half years.

Today, Wall Street will be a little jittery. Maybe prices will go up. Maybe they will go down. It hardly matters. Stocks must get back down in the valley again…until then, we’re not interested.

Bill Bonner
Markets and Money

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.
Bill Bonner

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1 Comment on "US Stock Market Investors Have Lost 20-30% Since 2000"

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CJ, London
Still relevant. Still too much smoke and mirrors. Companies need to pay better dividends to substantiate a higher price. Unproven hypothetical “high growth” sales pitches (Facebook) are for the venture capital markets not huge IPOs on the main boards and straight into the world’s main indices. It seems very mysterious to me that whilst 2012 households are now packed with… —[ flatscreen TVs, blu-ray DVD players, PCs, Xboxes, Wiis, Playstations, laptops, hi-tech cars, expensive branded clothes, vitamins, processed foods, expensive toys, expensive electronic games, telephones, mobile phones, smartphones, jet skis, quad bikes, magazines, ]— …the general level of stock markets… Read more »
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