Americans Are Very Long The Stock Market And It Is Making Them Millionaires
To investors, Inflation has been the story of the decade so far. We went from sub-2% in early 2020 to over 9% by the summer of 2022. Today, one of economists favorite metrics sits at just under 3%. This roller coater ride has had a significant impact on asset prices and investor psychology. On one hand, investors who have been allocated to the stock market continue to see their portfolio value increase as indexes push higher. The classic adage “time in the market is more important than timing the market” stands for a reason. The S&P 500 is up 85% over the last 5 years. Russell 2000 has appreciated 42% and the Nasdaq 100 is up 141% during the same time period. Investors simply had to invest in indexes and chill. Monetary and fiscal policy did the rest for them — inflation took off, the dollar was devalued, and asset prices went up. As stocks went higher, investors gained more confidence that higher prices were just around the corner. Add in the fact that existing capital in the market was also gaining value and you can see how we arrive at the new all-time high of stock allocation as a percent of financial assets. Wall Street Journal's Gunjan Banerji writes yesterday:
There is a debate raging due to this data — are investors merely riding the trend that will continue for the foreseeable future or are investors over-confident and a market correction is just around the corner? The short answer is no one knows, but I think the framework for evaluating the situation is wrong. Only short-term oriented investors should be concerned about the week-to-week or month-to-month oscillations in the stock market. Majority of investors should simply have a long-term orientation. They can be oblivious to price movements and merely continue dollar cost averaging into their preferred index. Given enough time, the stock market will continue going higher and is essentially guaranteed to be at new all-time highs. The United States debt requires dollar devaluation, which in turn pushes all assets denominated in dollars to be worth more in dollar terms. So the only people in the market who should be worried about short-term price movements are older folks who have less time to benefit from. Anyone under the age of 50 years old has at least a decade, and probably longer, to weather potential market downturns. The beauty of ignoring short-term predictions is that an investor is exposed to the market if prices go up and they are continuing to dollar cost average if the market goes down. If the market is up, your portfolio is worth more. If the market is down, you are buying more assets at cheaper valuations. Regardless of the scenario, being long the US stock market over decades is a cheat code — the US stock market is the greatest millionaire minting machine ever created. You just have to be able to allocate capital, stomach volatility, and stay focused on the long-term. And based on the latest data, it looks like more Americans are deciding to go long stocks. We’ll see what they do if there is turbulence in the coming months. Hope you all have a great day. I’ll talk to everyone tomorrow. -Anthony Pompliano Founder & CEO, Professional Capital Management Reader Note: BUILD Summit, our annual conference in NYC for founders, is coming up next month on September 26th. The event will provide top tier speakers, networking opportunities, and insightful business discussions on raising capital, scaling businesses, and building products. Current speakers include angel investor Balaji Srinivasan, Khosla Ventures’ Keith Rabois, Perplexity CEO Aravind Srinivas, Eight Sleep Founders Matteo Franceschetti & Alexandra Zatarain, and Passes CEO Lucy Guo. The event is free to attend and will be full of insights on how to operate a company at world-class level. Darius Dale is the founder & CEO of 42Macro. In this conversation, we discuss inflation, productivity, asset prices, political impact, federal reserve interest rate decisions, and outlook for 2024. Listen on iTunes: Click here Listen on Spotify: Click here Darius Dale Explains Why Inflation May Come Back In Q1Podcast Sponsors
You are receiving The Pomp Letter because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren’t finding this valuable. Nothing in this email is intended to serve as financial advice. Do your own research. You're currently a free subscriber to The Pomp Letter. For the full experience, upgrade your subscription. |
Older messages
Did The Government Push Rents To All-Time High Prices?
Tuesday, September 3, 2024
Listen now (4 mins) | Today's letter is brought to you by Domain Money! ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Podcast app setup
Monday, September 2, 2024
Open this on your phone and click the button below: Add to podcast app
The Fed Just Got The Certainty They Needed For Interest Rate Cuts
Friday, August 30, 2024
Today's letter is brought to you by Domain Money! ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Podcast app setup
Friday, August 30, 2024
Open this on your phone and click the button below: Add to podcast app
Nvidia Employees Prove Capitalism Still Works
Thursday, August 29, 2024
Listen now (2 mins) | To investors, ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
You Might Also Like
FREE AI training for marketers…
Thursday, September 19, 2024
Hi Reader, Do you know you need to do more with AI? If so, I've got some high-quality video training for you. It's designed by me. And for a limited time, it's free. GET ACCESS TODAY I can
Exciting announcement
Thursday, September 19, 2024
I've got an announcement just for you: Our master class series last year had a 99% satisfaction rate. Several people have emailed me asking for a repeat of the experience this year... So, we're
📣 Now open: free registration for Litmus Live, SEO for email, and more
Thursday, September 19, 2024
The latest email resources from the Litmus blog and a few of our favorite things from around the web last week. ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
Discover the new Digiday Streaming and Video Awards categories
Thursday, September 19, 2024
Showcase how your company is modernizing streaming and video
Fed Begins Easing Cycle with Jumbo 50bps Rate Cut
Thursday, September 19, 2024
Plus House Committee Questions SEC's Crypto Strategy in Divisive Hearing
[Webinar] 👀 Unlock lululemon’s winning social media formula
Thursday, September 19, 2024
Join us for an exclusive peek on October 1! ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏
🦄 The GTM coach for 12 unicorns
Thursday, September 19, 2024
An interview with Scott Leese, Founder and CEO of Scott Leese Consulting. 🤝
✅ The Forbes Parasite SEO Playbook
Thursday, September 19, 2024
GM nerds, Welcome back to the newsletter that makes it make sense: TLDR; favoritism, corruption, incompetence, etc. More on this later, but here's what's good this week: → Meta's New AI-
HubSpot and Shopify Are Both Going More Enterprise
Thursday, September 19, 2024
But Also — More SMB. To view this email as a web page, click here saastr daily newsletter HubSpot and Shopify Are Both Going More Enterprise. But Also — More SMB. By Jason Lemkin Tuesday, September 17,
How Flodesk bootstrapped to $27,000,000
Thursday, September 19, 2024
Let's break down how Flodesk scaled their SaaS business!