Stocks Suck!

May 1, 2009 by · Comments Off on Stocks Suck!
Filed under: Finances 

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We hear all the time that investing in stocks is the best way to grow your money in a passive way.  Over the long run stocks have always outperformed other asset classes.  hmm…  let’s see:  The Dow Jones Industrial Average (DJIA) closed at around 380 points on August 1, 1929 with a volume of some 3.8 million shares.  80 years seem like long term, right? $1000 invested in the DJIA on August 1, 1929 will be worth today, May 1, 2009 $21, 529 with a volume of around 10 billion shares.  Pretty good.  If we assume a 3% inflation rate for 80 years, it is equivalent to $2029 in 1929 dollars.   The chart on top shows our inflation adjusted grand invested in August 1929, of course backwards.  We doubled our money in 80 years! It doesn’t seem like a lot, now does it?

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