But does the market really always go up? When looking at the United States stock market it does actually seem like it always does go up. Especially when looking at a 20-year chart which is what most people look at. Most free financial websites have a 20-year chart set as one of their defaults. However, when you look at a 100-year chart of the US stock market, the picture there’s a lot less peachy . The first thing that jumps out is how long it took to get back to break even after the 1929 crash. However, even then, the US stock market chart looks stellar, because we’re not the ones that had to do the waiting for decades for it to recover after 1929. That was in the past, and it will never happen again, right? So, what can I tell you? I guess if we’re looking at the US market alone, even if you have to wait for a long time sometimes, historically it does actually always go up. But is that the case for all stock markets, or is the US a special case?
So, this gives us a bit of a different perspective. When your local mutual fund pusher at your local bank branch shows you their Andex chart, it’s easy for them to say that stocks always go up in the long run. Although this is mostly true, it’s not so easy if you have to wait half your life to get back to breakeven after a crash.
Market Crash or Mad Max?
Eventually the FOMC will have to decide what will result in greater chaos… Letting the market crash, or letting inflation get out of control.
What’s worse, a market crash, or Mad Max?