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Last year when the Dow dropped from 28K to 18K all my friends were selling off their holdings. I was going to do the same but spoke to my father, he told me sel

Last year when the Dow dropped from 28K to 18K all my friends were selling off their holdings. I was going to do the same but spoke to my father, he told me selling off at 18K does nothing but guarantee my losses. I decided to take his advice and am up 115K on the year. I don't think the gamestop story is over and just because these hedge funds are showing a loss right now, they still have the opportunity to milk that stock all the way down to zero, and they will. What is really unfair (but good for me) is from my investments and house value increase, I have made more in one year doing nothing than I did the 1st 15 years of my post school employment. I don't know how a young person can make it in these late stages of capatlism let alone support a family, maybe that's why there are so many riots.

techsupporter 6y ago
From my point of view, this is exactly the point. Among all of the physical and mental pain and misery this virus inflicted, it also deepened the chasm between people who were already doing pretty well...and everyone else. Several people in this thread are commenting that "well of course staying in the market is the smart thing to do since stable savings instruments don't pay for shit!" Yeah, and that's the problem. In just thirty short years, we've gone from pension plans and savings rates that might actually leave you with more purchasing power than you started (when considering inflation) to...better gamble it all in the stonkz. So much money has been put into stock market-based retirement funds (401k, IRA, 403b, and so on) that the stock market, which used to be for large institutions doing large institution things, cannot fail because it will sink everyone with it. And yet, the stock market has become so detached from the economy at large precisely because of that yawning gap getting even larger. For those of us who can stay home yet still earn our massive salaries of which we are now spending a fraction, we have huge stacks of cash just looking for somewhere to sit. For the first time in a decade, the average American's savings rate has increased, because consumerism ground to a halt. Yet for those who lost their jobs--because that consumerism failed--or who go out and risk infection because that's the only way to draw a paycheck, they are even more screwed. We've left our society with no stable way to save and no mechanism to provide for ourselves except ever-increasing spending relying on the wages and efforts of an ever-gigified economy. That sucks.
- deleted 6y ago
  [deleted]
- Aunche 6y ago
  > In just thirty short years, we've gone from pension plans and savings rates that might actually leave you with more purchasing power than you started (when considering inflation) to...better gamble it all in the stonkz Pensions and savings rates were always a gamble. These just provide an obfuscated the risk. Countless cities and companies are overburdened with pension obligations. Moreover, your retirement is always going to depend on the strength of the economy at the point time, so you might as well invest in broad indices.
lisp-fan-007 6y ago
Great reply - agree 100%
midasuni 6y ago
> I decided to take his advice and am up 115K on the year. This is what is so wrong with the system. When it fails to work for so many people (last 12 months the worst year for the average person for decades), but the wealthy are making record profits, a correction is long overdue. Whether that’s a correction with Guiletines or fascism or just a stock market crash doesn’t matter. When you have 200m you’re sitting pretty. When 200m have nothing you’re screwed. I’m glad you recognise it, most on HN are immensely wealthy high income champagne guzzlers first up against the wall when the revolution comes.
- sigmaprimus 6y ago
  I am hoping that I will be on the right side of the pitch forks when it happens. I am building a farm, so when I said that I did nothing for a year that wasn't quite true, I should have said I didn't get a pay cheque for a year. I do think You are right about the unfairness and expect the Occupy Wall Street and BLM protests will seem quaint if things keep going the way they are. I don't want to get political but am scared of what is comming now that everyone isn't distracted by the Orange man and are seeing how much wealth is being stolen from the masses.
  - midasuni 6y ago
    There are things that could be done. Aregentina recently put in a tiny tax on the very wealthiest. That could be done by western governemts. The problem is the coming crash will knock shares back down to 2017 levels, the biggest gamblers will be bailed out again, and media attempting to blame it on u/Diamond_6969 will either work (leading to backlash against technology) or fail (leading to backlash against big finance) Unless the average person with no investments is bailed out it would be pretty. 2008 is till fresh in people’s minds. Wiping out student debt might help, but I think at this stage people want to see the wealthy suffer, and don’t care if it causes pain for normal people either. It’s the situation that leads to revolutions - if you have nothing to lose, why not risk it all to force some empathy.
    - sigmaprimus 6y ago
imtringued 6y ago
>What is really unfair (but good for me) is from my investments and house value increase, I have made more in one year doing nothing than I did the 1st 15 years of my post school employment. That's basically what happens when you do supply side economics. It's a tool to increase deflation by giving companies money and thus invest into expanding their production capacity to the maximum. But companies aren't stupid. They know when they produced exactly as much as they can sell so they don't borrow more money than they really need. The end result is that prices don't change or they drop very slowly because the supply of goods is always high enough. The end result is slow and creeping deflation that is difficult to see. Once companies are well capitalized the excess money is then spent on random crap like stocks or housing without providing any additional value and it massively increases inequality because most people don't own any assets. A lot of basically dead zombie companies can easily coast on the value of their stock without doing anything productive. Inflation is good for workers because it makes business owners sweat. When demand for consumer goods grows beyond supply the price of consumer goods increases and that increases the profit margin for productive businesses who then start doing economically valuable work by employing people. Unemployment keeps dropping until companies have to compete for workers by offering higher salaries. Interest rates catch up with inflation and make it harder and harder to capitalize your business, meaning only the most productive companies with the most productive investments actually get to borrow money instead of throwing it into random nonsense like stocks because they ran out of ideas.
- sigmaprimus 6y ago
  The market is so complicated, there are many things like currency values and interest rates, GDP, exports and so on that also have an effect on inflation/deflation. I might have made it seem like I was some kind of a trading expert but I'm not, I use an investment advisor that handles my portfolio.

techsupporter 6y ago

From my point of view, this is exactly the point. Among all of the physical and mental pain and misery this virus inflicted, it also deepened the chasm between people who were already doing pretty well...and everyone else. Several people in this thread are commenting that "well of course staying in the market is the smart thing to do since stable savings instruments don't pay for shit!" Yeah, and that's the problem. In just thirty short years, we've gone from pension plans and savings rates that might actually leave you with more purchasing power than you started (when considering inflation) to...better gamble it all in the stonkz. So much money has been put into stock market-based retirement funds (401k, IRA, 403b, and so on) that the stock market, which used to be for large institutions doing large institution things, cannot fail because it will sink everyone with it. And yet, the stock market has become so detached from the economy at large precisely because of that yawning gap getting even larger. For those of us who can stay home yet still earn our massive salaries of which we are now spending a fraction, we have huge stacks of cash just looking for somewhere to sit. For the first time in a decade, the average American's savings rate has increased, because consumerism ground to a halt. Yet for those who lost their jobs--because that consumerism failed--or who go out and risk infection because that's the only way to draw a paycheck, they are even more screwed. We've left our society with no stable way to save and no mechanism to provide for ourselves except ever-increasing spending relying on the wages and efforts of an ever-gigified economy. That sucks.

deleted 6y ago
[deleted]
Aunche 6y ago
> In just thirty short years, we've gone from pension plans and savings rates that might actually leave you with more purchasing power than you started (when considering inflation) to...better gamble it all in the stonkz Pensions and savings rates were always a gamble. These just provide an obfuscated the risk. Countless cities and companies are overburdened with pension obligations. Moreover, your retirement is always going to depend on the strength of the economy at the point time, so you might as well invest in broad indices.

lisp-fan-007 6y ago

Great reply - agree 100%

midasuni 6y ago

> I decided to take his advice and am up 115K on the year. This is what is so wrong with the system. When it fails to work for so many people (last 12 months the worst year for the average person for decades), but the wealthy are making record profits, a correction is long overdue. Whether that’s a correction with Guiletines or fascism or just a stock market crash doesn’t matter. When you have 200m you’re sitting pretty. When 200m have nothing you’re screwed. I’m glad you recognise it, most on HN are immensely wealthy high income champagne guzzlers first up against the wall when the revolution comes.

sigmaprimus 6y ago
I am hoping that I will be on the right side of the pitch forks when it happens. I am building a farm, so when I said that I did nothing for a year that wasn't quite true, I should have said I didn't get a pay cheque for a year. I do think You are right about the unfairness and expect the Occupy Wall Street and BLM protests will seem quaint if things keep going the way they are. I don't want to get political but am scared of what is comming now that everyone isn't distracted by the Orange man and are seeing how much wealth is being stolen from the masses.
- midasuni 6y ago
  There are things that could be done. Aregentina recently put in a tiny tax on the very wealthiest. That could be done by western governemts. The problem is the coming crash will knock shares back down to 2017 levels, the biggest gamblers will be bailed out again, and media attempting to blame it on u/Diamond_6969 will either work (leading to backlash against technology) or fail (leading to backlash against big finance) Unless the average person with no investments is bailed out it would be pretty. 2008 is till fresh in people’s minds. Wiping out student debt might help, but I think at this stage people want to see the wealthy suffer, and don’t care if it causes pain for normal people either. It’s the situation that leads to revolutions - if you have nothing to lose, why not risk it all to force some empathy.
  - sigmaprimus 6y ago

imtringued 6y ago

>What is really unfair (but good for me) is from my investments and house value increase, I have made more in one year doing nothing than I did the 1st 15 years of my post school employment. That's basically what happens when you do supply side economics. It's a tool to increase deflation by giving companies money and thus invest into expanding their production capacity to the maximum. But companies aren't stupid. They know when they produced exactly as much as they can sell so they don't borrow more money than they really need. The end result is that prices don't change or they drop very slowly because the supply of goods is always high enough. The end result is slow and creeping deflation that is difficult to see. Once companies are well capitalized the excess money is then spent on random crap like stocks or housing without providing any additional value and it massively increases inequality because most people don't own any assets. A lot of basically dead zombie companies can easily coast on the value of their stock without doing anything productive. Inflation is good for workers because it makes business owners sweat. When demand for consumer goods grows beyond supply the price of consumer goods increases and that increases the profit margin for productive businesses who then start doing economically valuable work by employing people. Unemployment keeps dropping until companies have to compete for workers by offering higher salaries. Interest rates catch up with inflation and make it harder and harder to capitalize your business, meaning only the most productive companies with the most productive investments actually get to borrow money instead of throwing it into random nonsense like stocks because they ran out of ideas.

sigmaprimus 6y ago
The market is so complicated, there are many things like currency values and interest rates, GDP, exports and so on that also have an effect on inflation/deflation. I might have made it seem like I was some kind of a trading expert but I'm not, I use an investment advisor that handles my portfolio.