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Showing posts from July, 2017

Everyone Deserves A Shot at Happiness

The polarization in U.S. politics has reached a nearly untenable divide. If one party gains control of the federal government roughly half the U.S. population feels completely disenfranchised, and when the other party does so then the other half experiences that same feeling. This is not the way a nation can succeed, and in fact it seems apparent that ours is getting torn apart day by day.

Stocks are not going up

Stocks keep making all-time highs. Since the 2008 Great Recession, when stocks fell off a cliff, the S&P 500 index has climbed remarkably. An investor who invested in January of 2009 and held through this spring would have earned a 15.30% annualized return, including the reinvestment of dividends. Even an investor who bought before the crash, in January of 2007, near the pre-Great Recession highs would have earned an annualized return of 7.33%, including the reinvestment of dividends. So, what’s with the title, you might ask? Clearly stocks have soared.

I posit that the surging valuations of stocks during this period, along with those of other financial and real assets such as real estate, all bonds, leveraged loans, etc., have very little to do with the resurgence of the economy and say very little positive about circumstances. Instead, the significantly increased valuations have much more, if not entirely to do with the fact that we are measuring these things in dollars.  But fo…