They're not just pieces of paper -- they really do reflect an economic value. The problem is that since most stocks don't pay dividends any more, they become similar to a promissory note with an unpredictable payout. This's why I prefer dividend-paying stocks and junk-bonds -- at least you can rationally value them!
The point of the graphs is just to reinforce the fact that big stock market numbers are only good when the dollar is strong relative to other substitute stores of value. Record stock market gains when our [real] inflation's running at 7% aren't exactly good news.
Still - with inflation that high, my attempts to rebuild my retirement fund, even if it is about 50% bonds, are crippled at the moment until the dollar regains value. So why didn't you get into finance? Seems like you have a good head for it to me.
Honestly, if I'd had any introduction to it early enough, I'd have gone into Econ -- I wasn't actually introduced to it in any meaningful way until just a few years ago.
Keep putting it into your retirement fund; inflation may kill a chunk of it, but money not growing is shrinking even that much faster!
6 comments:
Your finances have been pissed in. Film at 11.
I always knew that stocks were subjective value pieces of paper - but this is not pretty at all.
They're not just pieces of paper -- they really do reflect an economic value. The problem is that since most stocks don't pay dividends any more, they become similar to a promissory note with an unpredictable payout. This's why I prefer dividend-paying stocks and junk-bonds -- at least you can rationally value them!
The point of the graphs is just to reinforce the fact that big stock market numbers are only good when the dollar is strong relative to other substitute stores of value. Record stock market gains when our [real] inflation's running at 7% aren't exactly good news.
Still - with inflation that high, my attempts to rebuild my retirement fund, even if it is about 50% bonds, are crippled at the moment until the dollar regains value.
So why didn't you get into finance? Seems like you have a good head for it to me.
Honestly, if I'd had any introduction to it early enough, I'd have gone into Econ -- I wasn't actually introduced to it in any meaningful way until just a few years ago.
Keep putting it into your retirement fund; inflation may kill a chunk of it, but money not growing is shrinking even that much faster!
Not too late to change careers...
Oh and yes - I agree that some growth is better than others. Your information just means that I'll be working until I'm 96 rather than 94. :(
I'm GenX: I'll be working 'til they carry me out.
Well, the nice thing about inflation is that it helps with debt... starting to make corn look good, too.
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